European brands are competing each other with blood spilling on all sides. They are making their suppliers and consultant (falsely called partners) feel it, by shopping around non-stop for short-term efficiency.
The worst cases take the creative ideas, which they have been trusted with and run off to implement them as their own by someone else. They also sell past their trusted distributors via online channels and web stores, exploiting these long-time distributors as showrooms.
What will all this lead to?
In the short term, these brands should become more profitable. For some reason, there is no evidence of this. In the longer term, however, their quality is bound to decline; their consumers become unsatisfied, and ditch them for other choices as the European brands save themselves to death. At the same time, the suppliers and distributors are getting bankrupt.
So who will benefit?
International investors, because money goes to money. And yes, more and more often they are Chinese.
At the moment, you can buy excellent brands with incredible IPR value “for peanuts”, as described the new owner of one Italian luxury brand. Keeping the patent portfolio of this brand up-to-date costs 100 000 euro per year, and as the European economy is what it is; even this seems to be too much, not to mention the investments in keeping the brand relevant with its users.
Because European brands are still looking at the world through their colonial lenses neglecting the growth, consumption, learning, and innovation taking place elsewhere, they are soon left on the battleground gasping for air.
Meanwhile, in 2013, Chinese investors bought out a record of 120 European companies, says Ernst & Young. Out of these businesses, 25 were German, 25 British, 15 French, 7 Italian and 7 Swedish. Largest amount of companies were in the field of real estate, but 21 were consumer goods companies. Automobile sector is one of the most interesting ones for the Chinese.
Money has no nationality. Will Europe soon be without?