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Burberry celebrates China as Beijing downgrades luxury...

BEIJING – For a moment, it felt like 2007.

“It’s the new China, and we’re the new face of Burberry.”

The high-end British fashion label hosted a splashy night out on Beijing Wednesday evening as part of its efforts to promote a younger face for the 155-year old brand and to celebrate its growing presence in China.

Adrienne Mong

Chinese models like Shupei strut their stuff for Burberry.

“I am so thrilled to be back here [at] this exciting time of China’s development,” said Angela Ahrendts, Burberry’s Chief Executive Officer, sounding an upbeat note reminiscent of the heady free-wheeling days leading up to the Beijing Olympics.

Ahrendts was on her way into the new Beijing Television (BTV) sound stage, where more than 900 guests—including celebrities, models, diplomats, businessmen, and VIP customers—were being fuelled by free-flowing champagne as they awaited the start of a digital fashion show and a live performance by Keane.

“This is the biggest, most innovative event we’ve ever done,” said Christopher Bailey, the label’s Chief Creative Officer.  The occasion was streamed live on the Internet via the company’s website and broadcast into self-standing boutiques around the world.

The decision to hold the event in Beijing reflects the importance of China to global purveyors of luxury goods.

Burberry – which currently has 57 stores in the country – plans to “open close to 100 stores in the next five years,” according to Ahrendts.

“It’s no surprise it’s one of the major growth markets in the world for us,” she said.  “It’s contributed a great deal to our growth.”

Adrienne Mong

Burberry plans to open close to 100 stores across China in the next five years.

Money money money
Luxury brands have long been smacking their lips at the potential of China’s consumer market – potential fed by regularly published statistics nurturing an image of hundreds of millions of hungry shoppers armed with fat wallets.

In 2010, China counted 960,000 individuals with a personal wealth of $1.5 million, up 9.7 percent from the year before, according to the annual Hurun Wealth Report 2011, published by a luxury publishing and events group in Shanghai.

“For most luxury brands, China – or the [mainland] Chinese luxury consumer – is number one,” said Rupert Hoogewerd, Chairman and Chief Researcher of the report. “Whether it’s number one in terms of market share or number one in terms of market growth.”

But it’s not just the super wealthy who are buying up high-end goods. 

A survey by McKinsey & Company last month showed that “the 13 million households comprising China’s upper middle class (incomes between 100,000 and 200,000 renminbi, or $15,000 to $30,000) offer the biggest growth opportunity…we expect to see 76 million households in this income range by 2015[.]”

Luxury sales, meanwhile, saw 16 percent growth in China in 2009 despite the global recession.  By 2015, they are expected to reach $27 billion, up from the $12 billion rung up last year, according to the same McKinsey report.

Which makes it all the more interesting that last month reports surfaced of a ban on the word “luxury” in advertising.

A ban on 'luxury'?
The Beijing Administration for Industry and Commerce on March 15 announced new guidelines restricting the content in outdoor advertising.  Companies were advised that they have until this Friday to vet their billboards and other outdoor ads to ensure they comply with the new regulations.

The very loosely-worded and vague circular focuses on “irregular content” and “irregular characters, words, and idioms.”  Specifics in the statement were given only once: “…including unhealthy political and cultural climate in outdoor advertisement, advertising hedonism, feudalism, pro-foreign sentiment, royalty, coarseness, vulgarity….”

Two days later, the state-run China Daily newspaper reported, “Officials will target advertisements that ‘promote hedonism’ or the ‘worship of foreign-made products.’”

The article then cites examples of words no longer to be used in ads: “supreme,” “royal,” “luxury,” or “high-class.”

Directives such as this appear to hamper attempts by luxury brand companies like Burberry to expand their presence in the China market.

But a long-time resident corporate communications strategist in Beijing argues the new ad restrictions reflect the central government’s concerns about class – not luxury.

The "nation's leaders are not prepared to allow China to become – or, more important, appear to become – a society divided by class as it was before the revolution," writes David Wolf.  "Allowing people to get rich is acceptable, as long as the Party can cling credibly to a claim that New China is fundamentally an egalitarian society."

Adrienne Mong

Members of Britpop group Keane pose for the cameras before their first live performance in Beijing.

China + luxury face an intertwined future
In the meantime, then, Burberry executives can merrily pursue their expansion strategy in China.

“China is not so dissimilar to Burberry,” commented Ahrendts.  Both, she explained, are “ancient” but driven by a young energy.  “The future of China and the future of Burberry honestly are inseparable.”

But let’s not get into a discussion about time.

Chinese officials, as it turns out, have issued new restrictions on that topic, too.  

Specifically, time travel.

The State Administration of Radio, Film and Television (SARFT) recently posted a statement on its website banning the use of time-travel in movies and tv shows, saying that the narrative device “disrespects history.”

But that’s a whole other blog.

With additional research by Bo Gu and Emily Ni.