Alexandre Chieng (E05): “In 2025, China Will Account For Half of the Global Luxury Market”

A graduate under the LVMH Chair, Alexandre Chieng (E05) was recently appointed Executive President and Co-Chief Growth Officer at Fosun Fashion, one of the biggest Chinese luxury goods groups. Here, he tells us about his strategy and the outlook for a market with unique potential.

ESSEC Alumni: Why did you decide to pursue your career in China after growing up in France?

Alexandre Chieng: It was a natural transition, by way of three opportunities that were too good to turn down. Firstly, a double degree with Peking University, one of the best universities in China, and then a volunteering opportunity in corporate finance with BNP Paribas in Shanghai, followed by a job offer at Loewe China, part of LVMH.

EA: What are the main particularities of the luxury market in China?

A. Chieng: In 2025, China will account for half of the global luxury market. A brilliant outlook, which is the result of a number of major societal shifts: the arrival of increasingly young consumers who are well-informed and demanding, and boast significant spending power; the growing cultural identification with Chinese brands and aesthetics; and the emergence of manufacturing 3.0 with major investment in technology, new materials, and R&D. These changes pose major challenges for international luxury brands, who will need to offer not only new products and services, but also reinvent the customer experience in order to reach the new generation.

EA: What advantages does Fosun Fashion possess in this market?

A. Chieng: Fosun Fashion is the luxury subsidiary of Fosun, one of the biggest private Chinese conglomerates, with a presence in 20 countries, more than 71,000 employees worldwide, and responsible for in excess of €100bn in assets. The group is one of the Chinese pioneers in cross-border acquisitions: in France, they have picked up Club Med, Saint-Hubert, Paref, and Lanvin.

EA: Some see Fosun Fashion as the future Chinese LVMH, notably because of its brand acquisition strategy...

A. Chieng: Indeed. In just a few years we have built a portfolio of iconic brands with Lanvin, as well as Wolford, St. John, Caruso, and Sergio Rossi. We have other similarities with the LVMH group: an attachment to heritage, a long-term strategy, widespread international growth, along with a presence in jewellery, cosmetics, wines and spirits, and selective retail.

EA: Does this mean that China can only secure a position in the luxury market by teaming up with established foreign brands? 

A. Chieng: Chinese luxury brands that are well-known and well-liked locally do exist, such as Maotai liqueurs. But they are still struggling to carve out a position outside of China. However, at Fosun Fashion we definitely believe in their potential, and we even think that the trend will pick up pace as China develops its hard and soft power.

EA: When Fosun Fashion acquires European brands, what is the impact on these brands’ identity and strategy? 

A. Chieng: Fosun Fashion’s success is built on the combination of its brands’ cultural heritage and the dynamism of the Chinese market. In order to maintain this dual dynamic, which we call the “Dual Engine”, we have created a dual leadership strategy. Take Lanvin, for example: two Executive Vice-Presidents jointly manage the entire brand. The first, based in France, is responsible for boosting Lanvin’s reputation in its home country, while respecting its heritage and values. The second, based in China, works more closely with the majority shareholder – Fosun group – and is an expert in local particularities and the workings of a rapidly growing market. It’s thanks to this double-headed operation that Lanvin has recorded triple figure growth in China. And we’re applying this same formula to our entire portfolio. 

Interview by Louis Armengaud Wurmser (E10), Content Manager at ESSEC Alumni 

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