The China files: luxury business students

Assistant professor in marketing at HEC, Paris, Anne Michaut, in her second article for K, discusses what’s happening in the HEC luxury programmes in Paris and Beijing.

How did you build a luxury programme?

In 2005, one of my colleagues in Strategy, Jean-Paul Larçon, who was often in contact with China, as HEC has had ties with that country for five years, suggested that luxury would be a good springboard to do more. So we began offering optional classes and built from a general base on luxury strategy, then added more on fashion and retail.

My activity centres on the programmes delivered for managers in China. For example, at HEC we have students specialising in finance, marketing, entrepreneurship, etc, who want to further specialise in the luxury sector.

How do you address luxury strategy in its fashion context ?

A great designer is by definition always someone who has individual, personal objectives, and a brand has objectives with respect to its identity and the sales it generates.  It’s individual versus corporate. So you have to find a way to let a person express himself within the brand environment – which is perfectly possible, because there are many great designers who have flourished within the brand. But you also have to have business people who can facilitate all that, to put the creative at ease and yet impose certain constraints that are intrinsic to producing a product. It’s not just art, it’s something that needs to sell, that must find its audience.

How are luxury, innovation and sustainability linked?

Innovation and sustainability are very close: within a luxury context, in order to make something sustainable, you also have to innovate. This month, for example, some of my second-year students are working on developing a project with L’Oréal. Managers explain to them the cosmetics market, and since it’s a brand that does retail, they need to understand the store environment, etc.

What are students seeking now? And how has that changed in the past decade?

In general, their relationship to big business has evolved. More and more, they are looking to do something more entrepreneurial. Compared with students of a few years ago, there is perhaps greater demand for freedom – they want responsibility, but without becoming too formatted. It’s a culture of enterprise. Some companies dovetail with this, others don’t.

Students are looking for adventure. We’re seeing lots more international students than we did just a few years ago. The campus mix has changed enormously, and workgroups are highly multi-cultural.

How to you approach the cultural side of luxury at HEC?

In our programme there are a number of Chinese managers working for local brands. In response to their requests HEC created a class called 'Luxury and Culture' to explore the link between the cultural environment and luxury: why luxury products have cultural roots, and how those roots are expressed in luxury products. It’s rather new and it’s something foreign students are eager to understand. When they come for the Paris-based portion of the programme, it's to understand the link between the country’s culture and luxury – that and the sophistication of savoir-vivre, of a luxury lifestyle. They are also asking for courses in wine appreciation, for example, or etiquette, how a table should be set, hotel service, proper manners for staff in a boutique, etc. There’s this notion of sophistication in understanding the relationship between culture and the product itself.

And the Chinese students in that mix?

We have lots of them, thanks to our numerous partnerships with Tsinghua University. For example, the Advanced Management Programme in Fashion and Luxury that we created with IFM and Tsinghua University in Beijing. There is a strong interest in that market.

At the rate it’s moving, I could never pretend to fully understand China! Every time I return, something changes.

How do heritage brands fit in to an evolving luxury landscape?

The big brands – the ones that reassure consumers in their own taste - are still very important. When you buy a Gucci bag, it’s established. But we’ll see a differentiation with smaller, more niche brands. This is not to say that consumers will abandon established brands – those brands are alive and well, but they are starting to seek more differentiating brands such as Balenciaga and Stella McCartney for example.

I think that we will keep seeing this trend toward ultra-luxury. When you have it all, what is the next dream? How can you always surprise the client? How can you take them further? It’s not necessarily about lavishing more diamonds on a watch. Creation will play an incredible role. How can we find these creative relays that will continue to surprise the client and let him or her dream? 

How will the face of luxury change in the next five or six years?

There’s the trend toward sophistication, which goes hand-in-hand with less ostentatious, more discreet luxury that is about quality living. In luxury there’s this ambivalence, as my colleagues Jean-Noël Kapferer and Vincent Bastien wrote in their book The Luxury Strategy (2009): there is luxury for others, versus luxury for one’s self. The first is ostentatious, with a distinctive logo. The other is for personal pleasure, a luxury experience with a product, the quality of the product, the very personal, almost individualistic pleasure of having it, touching it, enjoying it. Luxury for oneself goes with sophistication, and that’s important.

Executive education programme in partnership with Tsinghua (Beijing) and HEC (Paris) - See more at: