The Chinese luxury market is trying to find its prestigious identity among established luxury brands in Europe and America. In fact, many affluent Chinese reject "Made in China" products in lieu of superior imported quality. "China is not an easy market. Chinese consumers are very demanding; they don't like 'made in China' products," said Florent Perrichon. Chinese will undergo a cultural transformation whereby "Made in China" will be less synonymous with ticky tacky and more with rich cultural heritage, entrepreneurial spirit and quality.
China's Wealth is a Brightspot for Global Luxury
Western prestige brands are not unhappy China is importing luxury. Chinese consumers account for nearly 25 percent of global luxury sales, followed by Americans, Europeans and Japanese, each taking around 20 percent of pie. In fact, China has become the fulcrum of the global luxury industry. "The euro zone is a sizable market, but today the growth reserve is in the emerging countries, and particularly in China, whose demand is pulling the entire sector," said Isabelle Ardon, head of Paris-based SG Gestion's luxury fund. Even while the Euro market is suffering amid the current financial crisis, prestige brands are finding security in China's growing affluence.
Western Luxury Brands Flock to China
"For the Chinese consumer, luxury is synonymous with Western heritage. Today there are no big Chinese luxury brands, so there are no competitors," Ardon said. Western brands, Cartier, Louis Vuitton, Hermès, Tiffany & Co or Gucci, have established a foothold in China through years of brand building in the country, reports the Wall Street Journal. Indeed, Tiffany & Co reported that sales at its Asian stores opened last year (excluding those in Japan) had risen by 21 percent during last quarter, with 11 stores in China. Jaguar and Land Rover are opening a new plant in Nanchang, East China soon. "Next year, Land Rover's sales volume in China will surpass Britain as the world's second," said Scott Dicken, the general manager of Land Rover China.
There is Still Room for "Made in China" Luxury
Alongside Jaguar, Land Rover and Cartier of Western prestige, there still resides an opportunity for "Made in China" luxury. "China's high-end market is highly fragmented, with no single brand dominating individual product categories," writes the WSJ. "This is starting to change: In each luxury-goods category, five brands account for around 50% of the market, indicating early signs of concentration." Shanghai Tang is an authentic emerging prestige fashion house that appeals to Chinese. The brand blends China's subtle, delicate cultural heritage with Western flare. In fact, Fast Company dubbed Shanghai Tang "China's first global, upscale brand."
As China's nouveau riche settle into their new status as purveyors of luxury, expect the Shanghai Tang's ' a confluence of China's rich cultural heritage, entrepreneurial spirit and...
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