Design Holding bullish on Chinese market, to expand presence in nation

Design Holding, a Milan-based high-end luxury interior design group, plans to double down on its presence in the China market through digital marketing and retail expansion, said the company’s top executive.

Daniel Lalonde, CEO of Design Holding, which is operating in more than 130 markets and owns a cluster of industry-leading brands such as Flos, B&B Italia and Louis Poulsen, said in an interview with China Daily that their home design business has been enjoying strong tailwinds throughout the world, including the Chinese market. The reasons are that people are spending more time at home and have developed their homes into real multi-functional spaces.

“I think that now, people are more interested in cooking, having guests and working from home, so we’ve seen a rejuvenation of homes,” Lalonde said.

The company has identified the Chinese market as one of its two priority markets apart from North America.

“We are investing heavily in building our brands up in the Chinese market,” he said. With all of its brands in China, despite being in their early stages, “there is clearly a massive opportunity for the brands to develop and grow”.

Last year, Design Holding’s global revenue was roughly 700 million euros ($723 million), an annual growth of 21 percent. Its revenue in the Chinese market in the first half rose 16.6 percent year-on-year amid COVID-19, the company said.

The company will launch a flagship store of Fendi Casa in Shanghai in January 2023.

Lalonde compares how the luxury interior design market in China now is similar to what the luxury fashion sector was some 25 years ago in the country, which requires more effort in building awareness of the luxury design sector, yet it shares similar prospects with luxury fashion brands as their customers are the same.

China’s luxury goods market finished with strong double-digit growth last year, with some brands exceeding 70 percent. More Chinese consumers are making purchases domestically, which has led to a 48 percent increase in China in sales of personal luxury goods in 2020, and another 36 percent in 2021, totaling nearly 471 billion yuan ($66.9 billion), a near-doubling in just two years. The market is on track to becoming a top global market by 2025, according to a report by consultancy Bain & Co.

With eyes on younger luxury consumers in China, Lalonde said their research has shown millennials in China are entertaining at home more.

“I think they want their home to be a reflection of who they are. That’s why we see a lot of interest in our brands,” he added.

As younger generations have developed their interest in luxury fashion in terms of bags, shoes and watches, their next focus on luxury is what they have at home, the CEO said.

“There are some changes in behavior and, in the market, the behavior is driving a consistency toward luxury to redefine the home environment.”

Therefore, Design Holding has been enhancing its investment this year in integrated marketing efforts, including digital marketing, such as developing their social media campaigns on Weibo, WeChat or Xiaohongshu, with short videos of visits to the homes of celebrities or fashion key opinion leaders where their iconic sofas and lamps are presented.

“As part of our integrated marketing efforts in China, one important aspect is working through our brands’ social media channels to drive attention to the evolution of how people live and interact with spaces, both inside and outside the home,” Lalonde said.

In addition to marketing, the company has stepped up building distribution in first and second-tier cities, with plans to open in at least 30 cities in the country, both directly operated and working with licensees to add more exposure to their brands and products. The company currently has 150 points of sale in China and is expected to double the number of stores by 2024.

The CEO said along with its direct-to-customer business, demand for contract business geared toward luxury hotels, serviced apartments or luxury stores has also been on the rise in China where their brands supply design consultancy, furniture and lighting.

Globally, contract work takes about 25 percent of its total business in terms of revenue. He expects both its direct-to-consumer business and contract business in China will grow by 30 percent annually.

We are investing heavily in building our brands up in the Chinese market.”

Daniel Lalonde, CEO of Design Holding