Page 23 - BWConfidential19_2

“ The cost of television campaigns has increased a lot in China and we have decided that we will not do television in 2014 and are still in discussion for 2015; this is also due to the fast development of social media ” Ferragamo Parfums ceo Luciano Bertinelli sales increase, but when you stop, you go back to the initial results. The cost of television campaigns has increased a lot in China and we have decided that we will not do television in 2014 and are still in discussion for 2015; this is also due to the Ferragamo factfle fast development of social media. Ferragamo Parfums Headquarters: Florence, Italy With business in China becoming more costly, is the Wholesale sales 2013: €79.8m, +13,7% vs previous year market proftable? Top-fve markets: US, China, Italy, Russia, Japan Proftability is more complicated to ensure. China is becoming an expensive country and this is a serious matter. The cost Salvatore Ferragamo Group increases include mass media, beauty advisors as well as Sales 2013: €1.3bn managers—our team’s salaries are rising 10-20% every year. Sales by area 2013 Asia Pacifc: 37.1% How do you see expansion in tier-two and tier-three Europe: 25.9% cities in China? US: 23.1% This is where we can expand because we are already largely Japan: 9.2% present in Shanghai and Beijing, which are saturated and very Central and South America: 4.7% expensive. We have just opened a 40m (431ft ) counter with 2 2 Ferragamo fragrances, watches, and glasses in a fabulous new shopping mall [The New Century shopping mall] in Handan, a tier-four city of 10 million inhabitants. We have to constantly monitor the opening of new department stores and new shopping malls in order to seize opportunities. How do you see e-commerce progressing in China? Do you have a storefront on Tmall? E-commerce is developing very rapidly and Ferragamo fragrances are sold on various sites including Taobao, but we do not control our presence directly. We do not have a storefront on Tmall and with our local team we want to see if it makes sense to have one. Our local distributor ADE has 52 sub-distributors to serve the whole of China. It is extremely complicated to control the movement of all our products; all companies have this problem. n n n September-October 2014 - N°19 - BW Confidential 23