Coach builds It’s Brand in China
The leather goods maker has opened a new Hong Kong flagship and plans to acquire all of its outlets in China, Hong Kong and Macao managed by local distributors.
By Frederik Balfour
Hong Kong is label- conscious society where you can identify women’s place by the bag on her arm. Many people are making bee lines for these luxury hand bag stores like Luis Vuitton, Ferragamo, Gucci and Hermes. President of Coach Bickley says that they see a big opportunity in China and if they opened flagship store it will find a place on shoppers’ itineraries. Coach bags cost from $200- $400 making it top of the premium segment or the bottom of the luxury segment. According to New – York based Coach figures that Coach has more awareness and attracts loyal customers. Bickley estimates the market for woman’s leather goods in Great China region will more than double in the next five years, from $1.2 billion to $2.5 billion. He is going to increase the current sales from $30 million with a 3% market share to 10% with $205 million in sales. In order to achieve this growth they made a decision to manage its own stores. It currently has 24 locations and planning to open 50 new stores in China, Hong Kong, and Macao within the next five years. Also company hopes to open Coach’s first flagship store in Shanghai within the next 12 to 14 months. Bickley think that now China and rest of Southeast Asia will keep the company busy and Coach is not going to enter India where retail distribution is still immature.
By Frederik Balfour
Hong Kong is label- conscious society where you can identify women’s place by the bag on her arm. Many people are making bee lines for these luxury hand bag stores like Luis Vuitton, Ferragamo, Gucci and Hermes. President of Coach Bickley says that they see a big opportunity in China and if they opened flagship store it will find a place on shoppers’ itineraries. Coach bags cost from $200- $400 making it top of the premium segment or the bottom of the luxury segment. According to New – York based Coach figures that Coach has more awareness and attracts loyal customers. Bickley estimates the market for woman’s leather goods in Great China region will more than double in the next five years, from $1.2 billion to $2.5 billion. He is going to increase the current sales from $30 million with a 3% market share to 10% with $205 million in sales. In order to achieve this growth they made a decision to manage its own stores. It currently has 24 locations and planning to open 50 new stores in China, Hong Kong, and Macao within the next five years. Also company hopes to open Coach’s first flagship store in Shanghai within the next 12 to 14 months. Bickley think that now China and rest of Southeast Asia will keep the company busy and Coach is not going to enter India where retail distribution is still immature.
My Opinion 
I found that according to New - York based Luxury Institute’s Luxury Brand Market analysis for luxury hand bags Coach has largest mindshare among wealthy customers, 52 % of them said that they are familiar with Coach Brand and it leads at 29% of market share. It means that Coach is leading company in producing luxury hand bags in America and Europe. I think hand bags are very important accessory for woman which defines the wealthy woman’s social class and her fashion tastes. Therefore it is very common phenomenon in China too, especially in Macao and Hong Kong where many people can afford for Coach Bags worth $200. It is realistic that Chinese rapidly growing economy with 1.3 billion people can keep 50 stores in it driving the company to increase its market share within 5 years. Moreover Coach’s partnership with Imaginex will build brand awareness in Greater China to win customer’s confidence about the brand.
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