B&O Rushing To Catch Up With Luxury Rivals In China
Looking to better compete with luxury industry rivals in the China market and cater to growing Chinese demand for high-end audio and electronics equipment, Denmark’s Bang & Olufsen has spent much of 2012 positioning itself for a massive China expansion. Recently, B&O announced plans to raise US$29.2 million in a share issue to two partners, Sparkle Roll Holdings and the private equity fund A CAPITAL, along with an ambitious expansion plan to increase sales tenfold by plying its highest-priced items in China’s richest cities and more affordable collections in second- and third-tier cities.
According to A CAPITAL chairman André Loesekrug-Pietri, China is a relative blank slate for B&O, making the time right for the company to court the emerging middle class consumer. As Loesekrug-Pietri told Reuters, ”We saw that they had only a couple of percentage points of their business in China while all their peers and luxury groups do today between 15 and 20 percent of their business in China. There was obvious growth potential.”
In its first major attempt at making overtures to the Chinese consumer, Bang & Olufsen has turned to a technique employed by so many brands before it: When in doubt, bring in Jackie Chan. This week, the actor visited B&O’s headquarters in Struer, Denmark to publicize the company’s new partnership and China-focused expansion effort. Though B&O and Chan stressed his visit was as a friend of Sparkle Roll rather than a brand pitchman, let’s just hope Chan’s endorsement works out better for B&O than it has for others.