MARKET ENTRY AND DEVELOPMENT IN CHINA FOR LUXURY BRANDED CONSUMER GOODS

Market Entry and Development in China for Luxury Branded Consumer Goods



Market Entry and Development in China for Luxury Branded Consumer Goods

China is set to become the second large-scale consumer of luxury goods by 2015. Liana Cafolla talks to luxury brands about the bumps along the wayFor luxury retail in China, the numbers on o? er are nothing short of lip smacking: An estimated 300,000 millionaires and rising. Amiddle class of round 250 million people. A1.3 billion population, long starved of retail opportunities, that spent US$6 billion on luxury items last year, according to Ernst & juvenile estimates. And a prediction by buying into bank Goldman Sachs that China's utilisation of luxury goods will increase from 12 per hundred to 29 per hundred by 2015 - making it second only to Japan - in a international luxury market worth an estimated US$80 billion a year.China has really come a long way. Aluxury buyer market that didn't live 20 years before is now on a apparently unstoppable route to override top end retail. How did it happen? And is it all as good as it sounds? Continuing double-digit economic growth is ? lling pockets and encouraging consumers to []China is set to become the second biggest consumer of move away from the savings culture of older generations. “The beliefs is 'enjoy life today' against the old Chinese custom of saving, saving, saving,” states Lawrence Lau, administration controlling controller in the consumer merchandise partition at L'Oréal China.

Csuspending demographics furthermore fuel the angry spending. The mainland's one-child policy conceived a lifetime of cosseted only young kids, each increased by six adults. Now of buyer age, these little emperors are obsessed to the novelty of obtaining the western-style trappings of wealth.

Luxury latest trend items are apparel, accessories, handbags, shoes, watches, jewellery, and perfume for which meagre use or brandish of particular labelled goods brings prestige to owners, apart from any functional utility (Vigneron and Johnson, 2004). Luxury retail sales increase two-fold to $US220 billion over the last decade, driven partially by an unprecedented increasing two-fold of millionaire consumers worldwide (Demos, 2007; Gumbel, 2007). Europe and the USA are the traditional major markets, but Nueno and Quelch (1998) reported that Asia had arrive to account for 24 percent of luxury sales versus 40 percent for Europe and 28 per hundred for North America.

Increased wealth accumulation over the globe over the last decade has endowed more buyers than previously to buy luxury goods and commanded to expanded figures and kinds of luxury firms and goods (Okonkwo, 2007). Facing strong affray and saturation of traditional markets, luxury companies are increasing into emerging markets like ceramic where latest wealth accumulation has fuelled growing demand for luxury goods. China's luxury market, second biggest to Japan's in the Asia-Pacific district, is forecast to augment 28 per hundred every year until 2010, be obliged partially to the presence of 320,000 millionaires (Wiederhecker, ...