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RiA #10 Best Performing Brands 2017

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Samy Redjeb, Bluebell Group Development Director – one of the largest luxury and lifestyle distributors in Asia – gives his ranking of the most impressive brands in Asia for 2017.

“I have been asked to share with RiA readers my personal 2017 Top Ten consumer brands, and I have decided not to be too academic in this difficult exercise. The ranking is not the result of pure financial performances or total number of stores in Asia, but rather a combination of different criteria, such as product diversity, physical store rollout, e-commerce presence, store design and experience, social media, business growth and disruption. The aim is to provide market insights, and highlight successful approaches adopted by brands in Asian markets”.

APPLE: Best Brand equity / Best customer service

Apple
Source : Apple

In 2007, when Apple introduced its first iPhone, I was working for Sagem, a French mobile manufacturer, and my initial assessment was totally wrong. I was too arrogant after being in a cutting edge industry for 12 years, and I could not see how a 499 USD bulky expensive smartphone, with a lot of software issues selling initially only through one Telco operator per country, could change the entire world in less than 10 years.

One decade later my friends are still teasing me and Apple has redefined the world by introducing a product making two-thirds of their sales, which eventually reached billions, by enabling customers to have a computer in their pocket.

Something I had not foresee at that time was Apple’s plan to redefine the entire distribution channels of a sector; I have learned from it and I would never underestimate the power of branding again and how fast a market can change.

Apple’s brand equity is the most powerful driver and it is no longer able to innovate, and arguably, “it hasn’t been a leading innovator for some time now, but that’s fine!” was writing Forbes this year.

Apple is surfing on the launch of their new series of iPhones combined with a thorough rollout & marketing strategy in Asia, reaching a total of 58 stores in countries such as China, Hong Kong, Macau, Japan, Taiwan, and Singapore. While Apple stores are mushrooming all around, the company has been cleaning its wholesale activities and limiting them to only few key Apple resellers / partners. A strategy which seems to be also followed by Nike.

Apple’s physical mega stores have become traffic game changers for key shopping malls in the region within few years, while the brand has continued to develop its parallel business on e-commerce.

The store experience and quality of services are something that Apple has mastered to create strong customer loyalty and this community phenomenon that all brands are trying to build.

Apple has recently also launched on Lazada to satisfy the demand of the growing middle-class in South East Asia, who lives in cities where the brand has not expanded yet.

Among the announcements this year, it is also worth mentioning the plans for the first Apple store in South Korea, fiefdom of Samsung. While Apple’s expansion is happening, the brand is also constantly working on redefining and improving its retail experience with the new design concept of the ‘town square’, and innovative digital tools like the pre-order for apps on Apple Store.

Apple is a “Jedi” brand and we should all learn from it.

Apple on Retail in Asia

DANIEL WELLINGTON: Best social media brand / Best disruptive brand

DW
Source : DW

I first met Filip Tysander, the 32 years old founder of Daniel Wellington, in 2015 in cold Stockholm.

He is the perfect image of a Swedish man and fully incarnates the DNA of his brand: tall, blond, preppy with sharp blue eyes; he was not sitting behind a boring desk, but instead playing FIFA video games with his fellow young staff, having a break while they were building at rocket speed a new lifestyle watch empire.

I knew that DW would work in Asia because of the right equation of distinctive design, affordable price, and new digital way to move and touch consumers.

The Swedish watch brand is a real global success story after only 5 years of operations, and despite critics from old-school players saying it is just a “one day wonder”, I believe DW is here to stay and change the game in the lifestyle watch segment.

With a global turnover of over 300 million USD, the year 2017 was a retail acceleration for DW with a mix of direct-market operations, and partnerships with strong distributors, opening small, but extremely productive kiosks and corners in key markets. As of today, DW counts 30 stores in Japan, 35 in China, 8 in HK, 3 in Malaysia, and a few other doors in Singapore, Taiwan and Korea.

The brand has also moved fast within Travel Retail with DFS in the region, in addition to its e-commerce business being not only successful on its own platform (on which we suspect DW drive over 35% of its total business), but also using key market places like T-Mall in China, or pure-players like Zalora in South East Asia.

DW pioneered social media platforms, and built its brand through Instagram, Snapchat, WeChat, and over 20 other social channels to create a strong community of fans, ambassadors and bloggers, in a simple and consistent way.

The disruptive vision of the founder and digital marketing team were instrumental to DW’s success in Asia.

DW’s clean designs and affordable price point at 250 USD is doing the rest and appealing not only to millennials but also to wider demographics covering different generations of watch lovers.

The imminent opening of a prime flagship store in the most expensive street in Asia (Russel street in Hong Kong) will surely mark a milestone and begin a new chapter for the prince of social media.

DW on Retail in Asia 

GENTLE MONSTER: Best store innovation / Best Asian brand expansion

GM
Source : Gentle Monster

When I first joined the Business Development division of Bluebell Group, I remember wondering why we could not see any successful Asian brand with the potential of becoming a global brand in the luxury or lifestyle sector. I was trying to understand whether it was a lack of creativity, skills or vision to run an international expansion, but I have never been able to answer this question until recently.

Today, globalisation is reshuffling the cards with strong players from Japan, Korea, spanning from cosmetics, to ready-to-wear, F&B, and accessories. Gentle Monster is a good case study of an Asian brand that was able to adapt a mature product to the local Asian demands and trends.

Founded in Korea in 2011, Gentle Monster, which sells oversized and low bridge sunglasses with Asian fit at premium prices (from $200 to $500), has become one of the fastest trendy fashion eyewear brands in Asia and has recently started to expand globally.

Gentle Monster currently runs over 10 flagship stores, 7 of which in Korea, and the rest spread out in major cities worldwide, namely in New York, LA, London, Beijing, Hong Kong, Singapore, Shanghai, and Chengdu.  Additionally, Gentle Monster also relies on authorized retailers to target more than 20 countries.

In terms of revenues, the year 2017 registered 250 million USD, 70 percent of which is coming from direct sales. With a recent investment by L Catterton (60 million USD for a 7% stake), the brand is now on the move to open more markets and key stores in the region while cleaning part of their wholesale distribution.

Gentle Monster’s cool name and unique futuristic artistic store design and installations combined with very strong ambassadors, A-list celebrities and K-pop stars (top actress Jun Ji-hyun wore Gentle Monster’s lenses in My Love From the Star in 2013), greatly broadened the brand’s exposure to a mainstream audience.

Gentle Monster’s stores are characterized by an innovative and localized design, which makes each store unique and defined by a specific theme. CEO Mr Hankook Kim’s view on the physical store is very clear; each store needs its own story, that’s why all stores are different and they also keep changing in order to engage the customers with a  new experience all the time.

The brand disruptive success in a very monopolistic market controlled by a few giants such as Sunglass Hut and Safilo is an impressive achievement, driven by its young founder and his brand vision : Belief x Interpretation = Attraction or Newness.

I share his view on physical stores, they will become more and more experimental and entertaining in the next coming years, evolving fast, and playing increasingly a key branding and marketing role for global brands.

Gentle Monster on Retail in Asia 

Alibaba: Best digital player / Best innovative ecosystem

Alibaba
Source : SCMP

Including Alibaba in this ranking is quite controversial. It is not a consumer brand, but an entire verticalized trading and distribution ecosystem, a giant player which has become an inevitable game changer in Asia after only a few years of operations.

2017 has been extraordinarily important for Alibaba; in terms of revenues, it exceeded its expectations in its 24-hour e-commerce T-mall Singles’ Day notching up total takings of $25.3 bn USD moving 850 million parcels in a few days. With the 11/11 event, Alibaba proved once more how its deep knowledge of the domestic market is the key to transform each occasion into an opportunity to tap into a 1.2bn people market.

Alibaba’s success is not only based on revenues, but also on its strategic investments, planned to envision the future changes in the market. Alibaba has recently invested in start-ups such as Gobi (bike-sharing), Lazada (market place for South East Asia), Ycloset (e-commerce platform for fashion), Ele.me (food delivery), Mei.com ( luxury flash sales ), Grana (online apparel), and many other promising businesses.

In 2017, Alibaba has also launched the platform Luxury Pavilion to selectively sell luxury goods in China and initiated the online differentiation of e-commerce platforms to resemble the offline retail landscape. Following Alibaba, other e-commerce players have created a separate platform to host luxury brands online.

Besides its investments in online players, Alibaba also destined $2.9 billion to China’s Sun Art Retail Group, which confirms its interest into offline expansion, already stated with the announcement of its physical mall set to open in Hangzhou.

Alibaba’s interest for the offline retail has been disrupting the retail landscape. Seen as a threat at the beginning, it is now perceived by brands as an opportunity to boost the O2O approach.

Alibaba and American giant Amazon increasingly dominate online retail in their home markets, and they have recently started competing against each other on a more neutral ground and in cross-border e-commerce activities.

However, Alibaba sees its scope far more broadly than just being an e-commerce platform. Its strategy is to become more or less a combination of Amazon, Facebook, Google and Netflix. Indeed, other types of business may follow, such as a QVC-style shopping site that might combine with a Netflix-type offering.

This statement also suggests Alibaba’s wider mission of contributing to China’s soft power by focusing on creative industries such as music and cinema.

Having this eco-system and massive customer base in place, it would be a natural step to move deeper into developing its own brands and private labels, or acquiring and/or verticalizing more brands. Alibaba’s new developments are just limitless, nobody knows what is coming next.

Alibaba on Retail in Asia 

MONCLER: Best brand collaborations

Moncler
Source : Moncler

I have been living in Hong Kong for over 15 years, and it is always interesting to see people walking around in heavy down-jackets and winter clothing in a country where temperatures rarely go below 12C°, except in restaurants and shopping malls blasting freezing air conditioning.

In these years, I realized the perception of cold is something different from the enjoyment of dressing up to fight winter with style or traveling in warm expensive clothes. I am sure Mr. Ruffini – the man behind Moncler – saw it coming, and understood better than us how to build a global luxury brand by awakening a heritage sportswear sleeping beauty.

The opening of the new 5382 sqf Canton Road flagship store in November 2017 in Hong Kong was a testament to Moncler’s current good standing in Asia, with global revenues exceeding 1.18 bn USD for the first time in 2016 and expecting to jump again this year.

The company’s meteoric rise from a heritage sportswear brand to a cutting-edge fashion-forward powerhouse is strongly anchored to its Asian success and its very smart early stage collaborations such as Sacai or Junya Watanabe and Balenciaga, which helped to elevate the brand to iconic luxury.

The list of high profile figures wearing Moncler jackets includes tech giant Alibaba’s founder Jack Ma; business tycoon and founder of the real-estate enterprise Vanke, Wang Shi; and pop idol Faye Wong. Moncler’s high-end jackets with the iconic M logo have built up a substantial reputation among consumers in China, Japan, Korea and East Asia, which account for 40 percent of Moncler’s total revenues.

Moncler is opening selective retail flagship stores in the region and is continuously investing in eye-catching store window animations, which seem to be a good old recipe working also for Louis Vuitton.

In addition to the offline retail expansion, the brand is also pushing strongly on WeChat with KOLs & influencers in Asia.

We look forward to seeing Mr. Ruffini’s next move in 2018.

Moncler on Retail in Asia

DYSON : Best product innovation brand

Dyson
Source : Dyson

For Dyson, product is King. The brand managed to reinvent and beautify ugly household products, which consumers used to hide in their storage room, into expensive products with ultra-modern design, framed as if they were artworks.

Founded in 1993 by industrial designer Sir James Dyson – who still owns the company – Dyson built its reputation on the suction performance of its bagless vacuum cleaners, but it has since then branched out into other products such as futuristic hand dryers, fans and lighting accessories.

Cordless vacuums now generate around half of its business, and have grabbed the hearts of middle-class populations in emerging economies, especially in China.

Dyson revealed an impressive performance in year 2016: a 45% jump in sales to 2.5 billion pounds (US$3.12 billion) and a 41% increase and Ebitda of 631 million pounds.

The brand is now entering an acceleration phase, and founder James Dyson wants to tap the potential of a growing Asia. The company opened over 25 shops in 2017, including standalone stores in China, Taiwan, Korea, Japan, and is targeting to open India in 2018.

In Japan, revenue grew 30% in 2016, and it doubled in South Korea. China is now in its third year and maintained a strong growth in 2016 at +244%, backed by an investment in a new Shanghai office and a tripling of the local team.

Dyson is constantly investing in research and development, not only to evolve its existing range of products, but also to develop its battery R&D and manufacturing facilities.

Dyson recently created a buzz when they announced the development of their electric car with 400 engineers in Wiltshire working on this £2.5bn new project since 2015. According to Sir Dyson, the car should be launched in 2020 and probably manufactured in Asia.

Dyson has also opened a new £150 million high-technology motor manufacturing facility in Singapore — increasing its production capacity by 200 percent. This allows Dyson to meet the growing demand for its cordless vacuum cleaners. The advanced motors will be at the heart of our next generation technology.

The new interactive concept stores are engineered to encourage visitors to pick-up, test and experience the company’s technology.

Where is Dyson going? We are expecting great surprises in 2018!

Dyson on Retail in Asia 

PANDORA: Best gifting brand 

Pandora
Source : Pandora

Founded in 1982 and headquartered in Copenhagen, Denmark, PANDORA employs more than 21,200 people worldwide. The company is publicly listed on the NASDAQ Copenhagen stock exchange and ranked in the top 5 of the largest jewellery brands in the world.

PANDORA jewellery is currently sold in more than 100 countries on six continents through approximately 7,900 points of sale, including more than 2,100 concept stores.

In 2017, the brand has seen a steady growth in Asia Pacific, where it took back direct operation of part of its distribution network from its partners to accelerate its retail expansion.

In 2017, Pandora also opened its first store in India, and strengthened its presence in Australia and China, reaching up to 336 and 150 points of sales respectively.

Additionally, Pandora is also sold in 55 stores in New Zealand, 43 in Korea, 32 in Japan, where the brand opened 2 new key flagship stores in Omotesando and Osaka, 26 stores in Hong Kong, 25 in the Philippines, 21 in Thailand, 21 in Taiwan, 11 in Indonesia, 9 in Malaysia, 5 in Macau, 18 in Singapore, 6 in Vietnam, and it is also present in Myanmar. Its physical store expansion is supported by a strong localized website and online stores. Pandora has also invested in travel retail and it is widely distributed by most airlines and cruise line companies worldwide.

Pandora’s core products are charm bracelets. Their design allows customization, which is appealing to millennials, in addition to the collector’s element, which makes Pandora’s charms the first gift-giving choice.

The company has developed a highly sophisticated CRM program able to gather information to re-activate and engage clients via special offers based on their most important life events.

Pandora’s revenues are currently 3.6 bn USD (Source: Pandora Group). In 2018, we expect Pandora to open more stores given its strong relationship with valuable partners such as franchisees and distributors.

Pandora on Retail in Asia

 LULULEMON: Best store experience and innovation

Unroll_China_-_Forbidden_City
Source : The Business of Fashion

I am into yoga, but the real question is: do you know someone in Asia who is not?

Lululemon is a technical athletic gear brand originally from Canada, strong of an international identity framed by its global branding and its cool social community of yoga lovers.

The brand has seen a rapid worldwide growth in 2017, surfing on the global wellbeing and athleisure wave. Its brand value is 3.57 bn USD and its revenue worldwide reaches 2.34 bn USD (Source: Statista).

After only 5 years in Asia Pacific, the brand counts a total of 66 stores: 31 of which in Australia, 12 in China, 6 in New Zealand, 4 in Japan, 3 in Hong Kong, and 2 in Malaysia as well as in Taiwan, Singapore and Korea.

Lululemon stores, which are usually quite large for Asian standards, are characterized by clear lines and simple design, which make the items standing out and appealing to Asian customers.

Each store is not only a selling point but it is conceived as the place where the brand and community meet to promote a yoga approach to life.

The brand has made of its commitment to healthy lifestyle its major marketing strategy, which is based on the brand mission of embracing social, environmental, and economic health in every part throughout its activities.

Every week, the stores and showrooms push their products aside, unroll yoga mats and turn their spaces into instant yoga studios. Classes are complimentary and lead by instructors from local studios.  Recently, Lululemon has announced it will hold outdoor “Ice Yoga classes” in Korea.

This lifestyle approach has made Lululemon a desirable and creative tenant for shopping malls using Lulemon’s activities to create freshness in their retail floor and redefine customers’ experience.

What to expect next? Lululemon revealed it expects sales around US$ 4 billion by 2020 (double of US$ 2.3 billion in 2016). Out of these targeted sales for 2020, a strong focus will be put on menswear, which is expected to generated billions of dollars in Asia within the next few years.

Lululemon on Retail in Asia

SMCP: Best brand management

Sandro-Bw-1
Source : Sandro

In 5 years of Business Development, I have learned how hard it can be for Western apparel brands to succeed in Asia, in spite of the success they achieve in their own market. This sector is highly saturated and competitive due to the presence of strong local brands, poor customer loyalty, and very high retail costs.

While many brands are trying and failing, SMCP can be acknowledged as the exception and fully deserves to be in this ranking. Indeed, the French contemporary apparel group running 3 labels under its belt – Maje, Sandro, and Claudie Pierlot – has had another rocking year in 2017.

The group continued to expand in China and all over Asia, especially for the labels Sandro and Maje, strong of their new ownership by Chinese textile manufacturer Group Shandong Ruyi and their recent IPO this year for a valuation of USD 2.4 Billion.

In 2017, SMCP has found the perfect formula to appeal to the active Chinese middle-class customers: accessible luxury prices on chic apparel inspired by the top luxury trends fuelled by fast fashion supply chain and replenishment methods. SMCP is now offering the speed to market and the agility of a fast fashion brand with a higher-end French design, quality and customer experience.

The group built a network of chic boutiques in prime shopping malls and street locations, playing on demand for affordable luxury in Asia, and finding its niche clientele in between Zara and luxury brands.

In terms of revenues, SMCP has almost doubled its numbers in the past three years, reaching up to 657 million euros at the of September 2017, and ready to close the year at 1 billion Euros of worldwide sales.

This year, the group opened a new store in Elements mall in Hong Kong and entered two new cities in China, namely Kunming and Harbin. The group is now present in 20 cities in China, for a total of approximately 100 stores for the 3 labels.

The number of net openings in APAC region amounts to 48 new doors over the last 12 months from September 2016 to September 2017 with a business growth of 39% during the same period.

We are clearly impressed by their speed, growth and ability to run their expansion with 3 labels in Asia.

SMCP on Retail in Asia

STARBUCKS: Best F&B lifestyle brand

Starbucks
Source : SCMP

In Asia, and especially in China, premium coffee was not an obvious win 10 years ago.

In 2017, Starbucks has seen a tremendous expansion worldwide, totalizing more than 17,400 stores in 60 different countries. Its rollout has been particularly focused on Asia, and culminated with the opening of the astonishing Starbucks Reserve Roastery in Shanghai, which is the largest Starbucks outlet in the world, the world’s only 3-D printed tea bar, and Starbucks first Augmented Reality experience.

Founded in 1971, Starbucks is now the premier roaster and retailer of specialty coffee in the world, and it has become with time a lifestyle statement with most stores also selling mugs, tumblers, beers, wines, appetizers, books, music, and film.

The new store concept is destined to the iconic, global cities of Shanghai, New York, Tokyo, Milan, and Chicago. Those outlets are thought to deliver an immersive, ultra-premium, coffee-forward experience to target a new segment in the market.

The company’s strategy is no longer to grow by adding new locations, but to grow its revenue per customer, and attract a new tier of customers interested in new premium experiences.

A recent investment of $1.3 billion in China gives Starbucks control of its 2,800 outlets there in a buy-out from a joint venture with two Taiwanese firms. China is now the second largest market for Starbucks after U.S.

The company plans to operate 5,000 locations in China by 2021 and projects business in China to become more robust than its U.S. operations.

Shanghai alone is home to more than 600 stores, and it is the first non-U.S. city to have a Starbucks Reserve Roastery along with 110 Starbucks stores with Reserve bars offering small-lot coffees. The company has also opened a R&D centre in China to develop food offerings compatible with local tastes, such as Chinese mooncakes and teas. Chinese expansion is led by Hong Kong native Belinda Wong.

Besides China, Starbucks also saw a growth in Korea after the joint venture with Shinsegae, opening over 55 doors, and incorporating the use of AI to boost online orders. In 2017, Starbucks also reinforced its presence in Singapore and Taiwan, with over 50 stores in each country.

Starbucks’ expansion is not only happening offline, but also carefully planned in the online environment to engage the tech-savvy connected consumers. Starbucks and Ford have partnered with SYNC 3.0 using Amazon’s Alexa service to allow in-car Starbucks orders.

In January 2017, Starbucks launched My Starbucks Barista, a voice-activated “barista” baked into the coffee chain’s existing iOS mobile app that uses AI with a planned rollout through the summer and an Android version to follow.

Starbucks already leads the pack in offering the largest mobile ecosystem of any retailer in the world with 13 million Starbucks Rewards members in the US and more than 27 percent of transactions occurring via mobile device. Starbucks Mobile Order & Pay currently accounts for more than 7 percent of transactions in US company-operated stores.

Starbucks is the second most valuable brand in the food industry after McDonalds’, with a market share of 44,230 m USD. Its growth in 2017 is the highest in the last 20 years with revenues hitting 22.39 bn USD (Source: Statista).

What to expect in 2018? Back home in the US, Starbucks plans to open a massive location at 61 Ninth Avenue in New York City’s Meatpacking District in 2018 which will become the world’s largest Starbucks location.

Starbucks on Retail in Asia

 

If you have any questions contact our InTelligence Team

 

Samy Redjeb
Photo credits : Laurent Segretier

Samy Redjeb’s role is to profile and set up distribution partnerships with brands ranking from startups to mega brands in various categories in Asia.

He is a member of the Executive Committee and reports directly to the group CEO. He is also responsible of Bluebell Studio, the lifestyle wholesale division of Bluebell.

He was instrumental in setting up new partnerships with brands such as Manolo Blahnik, Kusmi Tea, Daniel Wellington, 3ina cosmetics, Brunello Cucinelli, Victoria’s Secret, Venchi, and more. 

 

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