As is known to all, in the last few decades China’s economy has been increasing fastest around the world. And it will soon surpass Japan becoming the largest market for luxury goods on earth. Luxury goods are the objects that are not so necessary but very desirable, possession of which gives a sense of comfort and indulgence. Most of them belong to one of these sectors: fashion, accessories, footwear, perfume, makeup products, jewellery and lingerie, etc.
According to the 21st Century Deluxe 2009 Report, Italian brands products are most wanted in China. For them it seems to be a good opportunity. Rich Chinese know exactly what they want and what they need. This is the reason why many fashion houses are planning to open more boutiques in China. But luxury just isn’t only style and accessories – it is just a life-style.
Here are the brands favored through the new wealthy Chinese: Jewelry & Watches – Cartier (France), Fashion – Gucci (Italy), Airline – Air France (France), Hotels – Peninsula (Hong Kong), Alcohol – Martell (France), Cars – Mercedes-Benz (Germany), Christmas gifts – Omega (Switzerland), Swarovski (Austria)
The Chinese are preferred to buy luxury items. Their passion for luxury is irresistible. In 2009 they bought a quarter of the world’s luxury items produced, at a total of 9.4 billion USD. This sum could be even higher, if account were taken of the purchases created through the Chinese outside the country.
It is the young people of China that drive the situation on the higher-end products who are 20 years younger than their counterparts in the USA and Japan. The new wealthy class is the new potential for this type of china marketplace, primarily due to the large population living in big cities. Being an influential person of higher social status impresses others. And how to let others know with whom you’re dealing with? Of course with branded gadgets.
What also should be noted is that young Chinese accepted quite quickly “shopping and mall culture”. There will be seven of the ten largest malls in the world located in China in 2020. What’s more Chinese like to shop abroad as well. According to The Word Trade Organization about 100 million of Chinese will go abroad in 2020. It is mainly because buying things in foreign countries are often much cheaper than buy them in China. That is why they often travel to shop in Europe’s designer trend boutiques.
Which would be the basic strategies for those who plan the opening of luxury brands in China? First of all, investment in promotion of new brands with sufficient incentive to the client is really important. Second, it is required to involve local elements to the production of luxury brands, mainly by moving the factories into China and by cooperation with local partners.