Despite global retail struggles and general confusion, the high-end luxury market in China appears to be peaking. In 2010, luxury goods sales raked in 212 billion yuan, growing an additional 25-30% in 2011.
More than 60% of the retail burst was a result of designer brands like Cartier, Jaeger-LeCoultre, Christian Dior, Burberry, Prada and Gucci, who reported sales increases of at least 20%.
China will become the primary luxury market within five years, according to investment firm CLSA, because of increased wealth and middle class expansion. The majority of the growth will in fact stem from new customers, as opposed to the current buyers, and high-end names have already begun to shift focus from Japan to China.
Chinese tourists are major sales boosters across the globe. Luxury sales in China take up 10% of the world’s market, or 15% including Chinese tourists. By 2020, the number will likely rise to 44%. Now, luxury-good consumers from China have reached a record high, spending $7.2 billion during the holiday season alone. These customers shop mainly for high-end, personal goods such as bags, jewelry, watches, clothes and perfumes, while other tourists spend their assets primarily on cars, housing and family tours or activities.
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