Chanel builds a new channel in China

Gabrielle "Coco" Chanel in front of the Coromandel screens of her apartment in Paris in 1937. Photos Provided to China Daily

Founder's legacy to help French company gain an edge over peers

Luxury brands are stepping up the ante in China, the world's second largest luxury market, and coming up with innovative strategies to drive sales amid intense competition.

The scorching pace of growth in China's high-end luxury market can be gauged by the fact that it is worth around $10 billion (7.33 billion euros) in sales.

While most of the companies are looking to expand their presence in China with more store openings and launching new products, there are several others like French luxury fashion house Chanel who are thinking out of the box to promote their brand.

Chanel is neither a stranger nor a new kid on the Chinese block. It is after all the second-most desired luxury brand in the nation after Louis Vuitton.

But where it differs from the rest is in its strategy of using its rich legacy to pump sales especially in a country that never played host to its founder at any point of time.

This time around the company has come up with a two-month exhibition at the Museum of Contemporary Art (MOCA) in Shanghai to showcase the design legacy of its founder Gabrielle "Coco" Chanel.

The "Culture Chanel" exhibition will provide a biographical look into the life and many influences of Coco Chanel, an orphan girl who founded one of the world's most prestigious brands in 1909.

From the "Culture Chanel" exhibition,The classic little black dress, a piece of 1965-1980 Chanel Haute Couture collection; Bottle of CHANEL N5 perfume 1921; Original "Comte" brooch created by Chanel in 1932 for her exhibition "Bijoux de Diamants".

The exhibition will showcase some 400 works, including 100 on loan from private collections and museums worldwide, and occupies both floors of the glass-and-steel museum.

The collection ranges from stained glass windows that inspired the iconic double "C" logo, the poetry from Jean Cocteau for Mademoiselle Chanel and the classic little black dress designed by Mademoiselle Chanel.

"China is one of the world's fastest-growing destinations for luxury products. As this interest in luxury grows, we would like to take this opportunity to share with the Chinese people our brand's culture, history and values, in a more comprehensive and interesting approach," says a statement from the company.

According to data from the World Luxury Association, luxury sales in China rose to $10.7 billion last year, a 14 percent growth compared to 2009. That growth helped it surpass the United States as the world's second largest luxury market, after Japan.

"Culture Chanel is an exhibition specially made for China," says Xu Beini, a marketing executive from Chanel China. "It is the biggest ever exhibition that Chanel has organized in China."

But what makes the exhibition more interesting is the relatively low entry price. Unlike Chanel products whose prices run into several thousand yuan, the entry fee for the event is just 20 yuan (2.22 euros).

"We hope to enrich the perception of Chanel among Chinese audiences by presenting the history and fundamental values of our fashion house," the Chanel statement says.

Jean Louis Froment, a well-known figure from the contemporary art and design world, is the curator of the exhibition that took more than three years to prepare and develop.

Much like most of its products, the company has styled its exhibition on unconventional themes. Unlike the traditional linear and chronological approach, the show is based on origin, abstraction, invisibility, liberty and imaginary approaches. Each theme is represented by around 10 works that belonged to or was related to Mademoiselle Chanel.

The exhibition will run till March 14 in Shanghai, and then move to Beijing in October. But the show has already evoked good response considering the buzz it is making in the virtual world. Nearly 9,000 micro blog users have signed up to be "a fan" of the exhibition's official account within half a month, while 4,000 messages about the exhibition have been exchanged on the country's most popular social platform.

"Shanghai has great respect for culture and has a tradition of bringing together the tastes of the East and the West," says Samuel Kung, chairman and director of the museum.

"The classic designs of Chanel have always attracted attention and enthusiastic responses from people," Kung says.

According to a report from Bain and Company, Chanel was one of the top three brands desired and purchased by Chinese customers last year, with 36 percent of the nearly 1,500 interviewees ranking it second after Louis Vuitton.

But this is also not the first time that the brand is preaching its culture in Shanghai.

In December 2009, Karl Lagerfeld, the creative director of Chanel, came to Shanghai with the Mtiers d'art "Paris Shanghai" collection by the city's landmark Huangpu River. He made it the eighth station for his global Haute Couture Urban series, after Paris, New York and London.

The company also set up a boutique shop at the upscale Peninsula hotel. Within 48 hours of its opening, all of the store's red purses, a limited edition item designed by Lagerfeld, were sold out, each at a price of 28,800 yuan (3,205 euros), while the average salary of the city is 2,000 yuan per month.

Though Chanel does not publish any sales figures, industry sources maintain that the company has boosted its brand and sales considerably in China. Chanel's China revenue rose by nearly 84 percent in 2009 compared with 2008, says a report from baidu.com.

At the same time the company is not completely ignoring the bread and butter path of store expansion. Apart from Shanghai, it is also boosting its strength in areas like Beijing and Hangzhou.

The company is also progressively expanding its Fragrance and Beauty retail operations to 33 mainland cities and has set up more than 85 outlets in the past 20 years.

"We will be having more fashion boutiques in 2011 including one in Guangzhou, Taikoo Hui mall," says an unnamed Chanel official.