The luxury market has good days ahead it in China
One study found that by 2020, the size of the Chinese middle class would almost double. To respond to an ever-stronger demand these new luxury consumers, brands will have to adjust to Chinese’s expectations.
It is no secret that the economy of China is not as good as few years ago. In order to reduce social disparities, the Chinese government has tried to reduce the display outward signs of wealth, in vain.
Consumption of luxury goods failing to reduce, is steadily increasing. Luxury can foresee a bright future in the coming years. This is, what the Boston Consulting Group (BCG) reported to members of the professional association of luxury. However, the consumption behaviour of this class is constantly changing, and to reach this niche market companies will have to develop new strategies.
If the big companies such as Louis Vuitton, Dior and Chanel should not encountered big problems, smaller brands will also have their share of the pie. The key to success will be in the ability to export to the interior of China, and reach new major cities.
China, one of the countries with the most millionaires’ households by 2015
An impressive data, in 2015 there should be about 1.5 million homes whose heritage is greater than or equal to one million dollars.
An even more important factor for the market will be the increase of the middle class (280 million households).
You should know that these new rich, who open the Western world of luxury, consume a lot. The reasons for such consumption are today mainly due to two predominant factors. The first is the one-child policy and the second, and not least, the absence of inheritance taxes.
It is clear that the share of China in world consumption of luxury will grow. One of the results of the increase in this market is the emergence of luxury brands in China, which represent new competitors, better adapt to the expectations.
The solution for big luxury groups will be to adapt in the best way their marketing policies, in order to defend their market share on the Chinese’s Eldorado.
Only downside, the Chinese government is more restrictive with foreign companies who want to establish in the territory. Administrative procedures are lengthy and laborious. One major problem is to obtain a work visa for the consultants of these companies. To obtain this precious paper, it is necessary to be fully aware of current regulations.
Despite this and the new competitors, China is more than ever a destination for exports of luxury.
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