The Chinese luxury market currently generates more than US$2 billion in sales per year. It is expected to grow 10 percent annually until 2015, when sales are expected to exceed US$11.5 billion. By 2010, China is expected to have 250 million consumers who can afford luxury products. As China’s economy surges ahead, the growing urban-affluent segment is luring luxury goods providers worldwide. Disposable income (a remarkable increase of nearly 600% in the past five years) has fuelled this increasing appetite for riches. Status is now de rigeur and the world’s top brands are cashing in big time. Cartier will soon have 30 stores in China, second only to the number in the United States. Bulgari plans to increase its outlets in the greater China region to 17. Prada, with 22 outlets, is building a flagship store in Shanghai. Valentino, the fashion house owned by Marzotto, hasn’t set up any flagship stores in Australia, but has two in Mainland China. Giorgio Armani will have 54 stores in China. More than 300,000 Chinese already have a net worth of more than US$1 million and the mainland’s millionaires control about US$530 billion in assets. The China Brand Association estimates that about 13 percent of China’s population, or 170 million people, now buy top-tier brands. This trend will only continue as luxury brands shift their focus to capitalize on the growing affluent market in China. The population of luxury goods consumer is expected to increase to 250 million by 2010, gaining the same purchase power as Japan as per China Brand Association. While the numbers are staggering, Luxury China hones in on the opportunities for luxury brands in China, as well as guidelines on how to succeed and tap this tremendous market potential.
Book Details:
- Author: Michel Chevalier
- ISBN: 9780470823415
- Year Published: 2009
- Pages: 300
- BISAC: BUS057000, BUSINESS & ECONOMICS/Industries / Retailing
About the Book and Topic:
The Chinese luxury market currently generates more than US$2 billion in sales per year. It is expected to grow 10 percent annually until 2015, when sales are expected to exceed US$11.5 billion. By 2010, China is expected to have 250 million consumers who can afford luxury products. As China’s economy surges ahead, the growing urban-affluent segment is luring luxury goods providers worldwide. Disposable income (a remarkable increase of nearly 600% in the past five years) has fuelled this increasing appetite for riches. Status is now de rigeur and the world’s top brands are cashing in big time. Cartier will soon have 30 stores in China, second only to the number in the United States. Bulgari plans to increase its outlets in the greater China region to 17. Prada, with 22 outlets, is building a flagship store in Shanghai. Valentino, the fashion house owned by Marzotto, hasn’t set up any flagship stores in Australia, but has two in Mainland China. Giorgio Armani will have 54 stores in China. More than 300,000 Chinese already have a net worth of more than US$1 million and the mainland’s millionaires control about US$530 billion in assets. The China Brand Association estimates that about 13 percent of China’s population, or 170 million people, now buy top-tier brands. This trend will only continue as luxury brands shift their focus to capitalize on the growing affluent market in China. The population of luxury goods consumer is expected to increase to 250 million by 2010, gaining the same purchase power as Japan as per China Brand Association. While the numbers are staggering, Luxury China hones in on the opportunities for luxury brands in China, as well as guidelines on how to succeed and tap this tremendous market potential.
Currently the China market generates more than US$2 billion in luxury consumer goods sales a year and sales are growing 20% to 30% per year. China is now the third-biggest consumer of luxury goods, just next to Japan and the USA, accounting for 12% worldwide, up from 1% just five years ago, and going to take over the No.1 spot by 2014 (Bain & Company). Young urban salaried workers are also lapping up luxury goods. 175 million or 13.5% of Chinese consumers can afford a variety of luxury brands. Of this group, an estimated 10 to 13 million are active purchasers of luxury goods including top brand garments, accessories, home wares, cosmetics, jewels, and yachts, etc. China will also soon become the world’s number one purchaser of luxury automobiles.
– Identifies the major trends in the Chinese economy and in the consumption patterns – The Chinese luxury market by sectors – Addresses critical on-the-ground issues, i.e., how to distribute, selecting the best store set-up, communications and advertising in China
About the Author
Doctor of Business Administration in Marketing and Retailing from Harvard Business School, Michel Chevalier has led at the same time an academic life, with full-time teaching experience at INSEAD and HEC, and a business life. He was General Manager of Paco Rabanne Parfum and President of Paco Rabanne S.A. He then became Executive Vice-President of Bluebell Asia and President of the Revillon Group. Based in Shanghai, he is now a partner at EIM, with offices in Shanghai & Paris, he teaches at the University Paris Dauphine in the MBA program specializing in luxury (ISML, Sup de Luxe). He has published many articles on retailing (Journal of Marketing Research, Journal of Marketing, Journal of Retailing) and the book that he co-authored with Gérald Mazzalovo, Pro-Logo, has already been translated into five languages. Luxury Brand Management, also with Mazzalovo, is published by John Wiley & Sons (Asia) Pte Ltd. With a PhD degree in Marketing from Essec Business School Paris, Pierre Xiao Lu is Assistant Professor of Marketing at Fudan University in Shanghai, Visiting Professor of LVMH Chair at Essec Paris-Singapore and Consultant of Chinese Luxury Market for many multinational luxury firms, such as Lacoste S.A., PPR-Gucci, LVMH etc. His articles have appeared in academic and professional journals and presented at conferences (AMA, AFM, Comité Colbert, Harvard Business Review China and Financial Times China). He is also author of the book, Elite China – Luxury Consumer Behavior in China.