Why there are no Chinese luxury brands in watches or handbags?

This is a question that most Westerners pose themselves. And it would require a book, not a short article. However, there is an aspect that people who do not know China and Asia in general often overlook, and I would like to explain it here now, as I experienced it firsthand myself.

Most of the people in West assume that China works in a similar way to what they are accustomed to, and it is not. Big time.

To tell you my story, I was involved in a design/brand development project for the government of Malaysia in a related field — furniture — which happens to be my other field of specialization.

If you balk about the paragon, please remember that:

• most of APACs businesses and industries are run by ethnic Chinese;
• high-end/luxury furniture has a lot of common issues with high-end/luxury watchmaking.

This particular project — three years in the making — took me to personally meet and visit almost every major furniture manufacturer of Malaysia. And I have learned much about the current state of the art regarding the specific sector of furniture-making. Which, I have to add, is one of the easiest to get into, as there is no significant entry barrier (technology, skill, machinery) that impedes your entry.

1 — The companies are not culturally ready to accept this huge change of paradygm

What I have learned is that the current generation of businessmen in the area is still not ready to accept that there are other values in play other than functionality. For the typical ethnic-Chinese entrepreneur, details are not that important, because they have never been that important. And design is considered a detail, especially if it involves an expenditure — like having to hire and pay a designer to create the stuff. The same can be said about any other additional activity that involves higher costs: better finishings and better materials come to mind.

2 — The current companies are not built on a luxury business model

If you have always worked with an eye towards the expansion of your output and optimization of costs, someone who walks in and tells you that you should do the contrary of what you have already held as a business goal (REDUCE your output, pay MORE per unit, INVEST in useless things like fancy marketing and design and collaterals) sounds like a HERESY.

And you are basically right: from your perspective and cultural/business heritage this IS a heresy. And your company is not built to this end: years and years of experience have shaped your company to become a no-frills manufacturer of a sizable quantity of good products. You have huge inventories, you have humongous warehouses full of components, and maybe a dedicated fleet of trucks that roam the country to deliver your stuff.

When I talk to my audience — which is far too polite to burn me on a stake for my radical ideas — and tell them that they could achieve the same financial results by selling five chairs vs. a container of them, they can foresee the scenario, but it is such a great change of perspective that it is next-to-impossible for them to embrace it fully.

This is a Superleggera, designed by Giò Ponti for Cassina. It is the chair every product designer would want to make. I spare you the details — but you can read about them in this answer, here, if you are interested:

Why is designer furniture so expensive?

Let’s say that it was revolutionary in many instances. It is still in production. And it costs an arm and a leg — like 1,000 US$ B2C.

What you see here instead is the typical no-name rubberwood chair made in SEA. You can buy this chair in stock in places like Alibaba, and it starts around 20 US$ apiece (B2B), so you would pay it around 40 US$ each B2C.

This means that with the expenditure of one Superleggera you could buy 25 chairs like this. Think about the difference in the kind of production needed to make the two. Personnel, marketing, production, everything.

The end result might be similar — a chair. But the process is entirely different, as will be the final result.

This means that to make this different kind of products you need to be extremely brave, bordering on foolhardy, and possibly, start anew, or at the very least, start small and devote a small part of your production capacity to this end (which is what I advocated). But to incept such a change of perspective it takes time — lots of time and trust on the possibilities to let this transformation happen.

So, I salute with enthusiasm the new releases that are coming from Asia in the specific sector of luxury — and here I mean in one of the fields that lies at the core of this question: horology. And I dare to add, mechanical horology.

For a long time, the world has depended on Swiss watchmaking on this field. I have to say that these days are almost over.

Some Chinese manufacturers are doing it right, and they will eventually succeed to fill the empty spot that is forming, shaping and growing: the desire to have something which is proudly made in the East to cater for the desires of the affluent market there.

There is this:

It is a Celadon, “proudly made in China”. Look at the details of the movement: a swan-neck regulator, blued screws, rubies mounted in screwed bushings. This is quality work, even if I see some issues here and there that would need to be addressed.

Just take a look at the dial and its finishings, here:

This is a very nice watch. And from my info, it is available at less than US$ 1,000 — which makes it good, if not excellent, value. We are not on the same level as a Swiss watch — no way. But we are getting there. And this is a completely Asian-made product — there is no “Swiss” here in any place. If we want to examine something that has already won accolades in the West, we can just examine Ming:

But Ming is a Malaysia-designed — but Swiss-made by Schwarz-Etienne — timepiece which has won an award at the GPHG — the Oscars of horology. So, I am not totally counting it as “truly Asian” (and I am leaving aside the Japanese, which are renowned by the technical and aesthetic results of their timepieces).

But the guy above, the Celadon, is. It is not the first, and won’t be the last.

So, I feel we are set to experience a lot of changes in the next future — and one of them will be the development of ethnic-Chinese luxury brands which will conquer the East, and possibly, the West as well. Even if we are divided by borders and lockdowns and think differently from each other, our goods CAN travel, and they do.

Time for some shameless self-promotion

If you want to get to know more about horology, please check my line of books, The Watch Manual (here’s the LINK) — you can download an 8-chapter extract completely for FREE to check if this is something that you’d like.

This answer contains promotional content.