By the Arno river, nestled against a lampredotto shop where Florentians devour tripe sandwiches, is a nondescript atelier, a workshop.
And in this atelier, redolent with the smell of warm leather and nostalgia, sits a man with thick horn-rimmed glasses, hair greying at the temple, hunched over a single shoe that he stitches with the same loving devotion with which Brunelleschi crafted the dome of Florence’s cathedral. It must have been in a workshop like this, about 200 years ago and 1,000 miles away, that Thierry Hermes built his first horse saddle, and later, a hand bag to hold saddles.
Over the last century, iconic European brand powerhouses have emerged to feed the Western market for aspiration. But the tide of economic power has shifted East – and so has the nature and the epicenter of aspiration.
China and India have emerged as global powerhouses fueled by a large population, growing urbanization, and a burgeoning middle-class with money to spend. Brands are licking their lips, poised to lay claim to virgin demand. Consider this: Only 11% of Indian households have a washing machine. When the vast majority of a nation with more than a billion people are entrants to category, it is a windfall waiting to happen. But the nature of this emergent demand is not of a familiar variety – it is aspirational, yet frugal. Status-seeking in Asia has extended beyond Gucci and Rolex. Forrester data show that 59% of metro Chinese and 58% of metro Indian consumers are influenced by what is new and fashionable, compared with just 25% of US and 14% of UK consumers. Status-seeking has moved from 5th Avenue in New York to Main Street Mumbai and Shanghai. And in true Main Street fashion, consumers are frugal: For 55% of Indian consumers and 46% of Chinese consumers, price is more important than brand name.
A niche market for high-end status is now a mass market for aspiration. As luxury transforms from high-end to accessible aspiration, the need to cater to image and status is now standard marching orders for all brands. For traditionally aspirational brands, the answer lies in accessibility. Audi has succeeded in China with its new entry-level Audi 3, which has seen almost 30% growth in 2016. Apple’s cheaper iPhone 5C struggled because its plastic backing and bright colors gave it away as a cheap cousin, but the company is driving growth the Indian market, marked by fierce price competition, with cheaper iPhone SEs and older generation devices. The trick for brands is not just about making aspiration accessible, they need to work in the other direction – what is accessible needs to be aspirational. For example, a soft drink campaign in India features convertibles on a pristine expressway with perky, flirtatious teenagers. This is far removed from the reality of India, but very close to the aspiration of millions.
The conduit for making global aspiration relevant to Asian customers is local digital channels. Facebook and LinkedIn may be floundering in China, but the West should not jump to the horribly erroneous conclusion that the East is not digital-savvy. It’s quite the opposite – Indian and Chinese consumers are voracious users of social media and are much more likely to be what Forrester calls “Progressive Pioneers” than US customers. Roadside stands in Shanghai proclaim “scan code, no cash,” even as the Coach, Moleskine, Nespresso, and Ray-Ban stores in the same shopping strip do not accept Alipay. Add to the digital mix the collectivist nature of Eastern society, and you have a recipe for viral branding. 57% of Indian consumers say that they rely on recommendations from friends or family when making purchases, compared with 17% of UK consumers. In China, 67% consumers say they often tell friends about products that interest them compared with 35% of UK consumers. Seed the hyper-sharing, hyper-connected Indians and Chinese with a compelling brand story that is aspirational, yet accessible, then watch it catch fire on WeChat and WhatsApp.
The lure of the Chinese and Indian markets remains high, but this could well be a siren call for the brands of the West. The prize is large, but what it takes to claim a share of that prize can be daunting. Winning in Asian markets requires of marketers a willingness to adapt their branding and marketing strategies to a very different model of digitally-fueled accessible aspiration.
Dipanjan Chatterjee is VP and principal analyst at Forrester. He tweets @dipanjantweet