The Rapid Growth of Chinese Luxury Market is driving the World Economy Today
Posted: May 05, 2014
China is currently the hotspot for luxury brands. Thus brand owners are in need of expert consultation with consultancies such as luxury consulting Shanghai to design perfect market campaigns and business strategies to capture the market for luxury goods in China.
China is currently the world’s second largest consumer market for luxury goods next to Japan. The total consumption of luxury goods in China is expected to cross US$ 9.4 billion and reach US$ 14.6 by 2014. This startling revelation by the World Luxury Association further shows that Chinese luxury market accounts for 27.5% of the world’s luxury goods sales. This is primarily due to constant rise of disposable income of the Chinese people in recent years. Global brands thus are targeting China for their expansion of business.
Why Chinese Market is Lucrative for Global brands?
There has been a vast shift in the attitude of Chinese people towards luxury goods as their income rose higher and higher. With rapidly rising incomes, luxury products became widely available in the market as the Chinese consumers have become more conscious about display of wealth. Luxury brand owners thus saw that their consumers are comfortable buying luxury goods and this interest is trickling down to the middle class people as well. This has created new growth opportunity as people are moving beyond handbags, jewelry and fashion and spending on wellness activities like spa and exercise equipments.
The second reason is Chinese consumers demand moresophistication today as they get more exposure to luxury brands overseas through internet, travel and first-hand experience. Their tastes for luxury goods have become more discerning as millions of Chinese are now familiar with luxury stores, fashion magazines and fashion websitesand blogs. Research has shown that they are now familiar with the names and as well as the price of luxury goods and no longer wants fake brands. Their wide exposure to fashion market through travel helped them set high benchmarks and allowed them to make comparisons of quality and price back home.
With such a large population number and the huge demand for luxury goods has spurted the growth of urbanization beyond the large cities of China such as Qingdao and Wuxi to the suburbs. This is creating new markets for luxury goods which can prove to be profitable for global brands. Many small cities have expanded their boundaries to cater to the growing presence of luxury stores.
Economists say that luxury sales is expect to triple over the next five years and this will lead to luxury consulting, creation of a new job. Already, there are several consultancies in China offering consultation to global and domestic luxury brands such as luxury consulting Shanghai.
Luxury Consultation in China
With the rising demand of luxury goods, several global brands are now planning to invest in china and expand their growth. However, it is easier said than done as these businesses have to tackle different issues. The Chinese entrepreneurs like transparency in their dealings, customers there are very particular about exceptional service at stores and currently majority of the customers look for brands which have an organized and attractive website or online shopping portal. Therefore, entering into Chinese market requires designing effective marketing strategies which the luxury consultancies such as luxury consulting Shanghai perform for big to medium brands. These consultancies work with experts who have great knowledge about local economy, market trends and consumer behavior having conducted market research with their advanced tools. Thus, luxury brands now rely on these agencies that help businesses forge a good relation with the Chinese consumers and help them establish their brand in China.
Author Bio: The writer is a renowned economist researching in China and is studying the growth of luxury consultancies such as luxury consulting Shanghai and more.
The author is an expert in studying various markets including B2B Strategy the features and changing factors for different marketing needs.