Kering plans ambitious expansion

Kering Group, owner of Gucci, Saint Laurent and Bottega Veneta brands, plans to open a minimum of 10 stores across a diverse brand portfolio in China annually to bolster its growth, said a senior executive of the Paris-headquartered luxury conglomerate.

Jean-Marc Duplaix, Kering's deputy CEO in charge of operations and finance, said that Chinese consumers contributed to 26 percent of the company's total sales in the third quarter of this year. They are expected to increase their international travel and make additional purchases in various countries.

Kering has around 6,000 staff members and more than 400 stores — almost a quarter of its global retail network — across 40 Chinese cities. Half of Kering's stores in China were opened during the past decade.

Among Kering's top 10 cities in terms of sales globally, five are in China. This highlights the significance of China as a pivotal market for the French company, he said.

"The reason extends beyond just the business aspect. It's about establishing a meaningful connection with Chinese consumers," said Duplaix.

Kering manages a series of renowned fashion, leather goods and jewelry brands. It brought a wide range of product selections to the recent sixth China International Import Expo in Shanghai, he said.

Eyeing a consumption uptrend, many of Kering's brands, such as Gucci, Saint Laurent and Boucheron, have either opened new stores or expanded existing ones in Chinese cities, including Beijing, Shanghai, Chengdu in Sichuan province and Nanjing in Jiangsu province this year, he said.

The beauty business holds great promise for Kering in China as the local market has witnessed rapid growth of all categories in recent years, he said.

China is expected to become the world's largest luxury consumption market by 2025. The Chinese mainland market, with strong growth in the first quarter, is expected to pick up pace again this year, according to global market consultancy Bain & Co.

In the past few months, Europe saw the return of its first group of Chinese tourists after the COVID-19 pandemic, and more sustained tourist footfalls are expected toward the year-end and next year. This year could see solid growth overall, driven by China's recovery and sustained growth in Europe and the Americas, Bain & Co said.

Noting online distribution has become a major industrial trend in China, Duplaix said Kering's team in China has been authorized to tweak its sales strategy to suit local market dynamics. They are free to seamlessly integrate various technologies and merge global resources with local digital tools.

With next year marking the 60th anniversary of the establishment of diplomatic relations between China and France, Duplaix stressed that Kering has long-term confidence in the Chinese market. The group will continue to explore new opportunities in the world's second-largest economy.

While Shanghai and Beijing remain dominant in the local market for many global luxury goods companies, emerging cities like Chengdu, and Hangzhou in Zhejiang province, are gaining prominence. This trend is gradually reducing the gap between them and top-tier cities, said Guo Xin, a marketing professor at Beijing Technology and Business University.