Leading Enterprises Accelerate The Layout Of China'S Luxury Market

When the western countries return to rational consumption, the emerging economies represented by China are still in the stage of consumption upgrading and consumption diversification. At present, China is already the second largest luxury market in the world after Japan.

In the face of China's huge consumer market, domestic enterprises can no longer sit idly by. From tourism to clothing, leading enterprises in major consumer industries began to lay out the luxury market. They believe that after a period of cultivation, the luxury market will give them the most "luxurious" feedback.

According to McKinsey's report on the rising China luxury market, by 2015, luxury sales in China are expected to reach US $27 billion, which will surpass Japan as the world's largest luxury market. By then, 20% of global luxury goods sales will come from China.

People in the industry even think that the first time that China will climb up will come ahead of schedule because of Japan's earthquake strike.

　　 Mckinsey The report gives an astonishing statistic that China's luxury consumption accounts for less than 1% of the world's share in 1998 and has climbed to 10% last year. The proportion of consumers who buy luxury goods to satisfy their personal tastes is growing rapidly, from 25% in 2008 to 36% in 2010. Among them, 13 million middle-class families (annual income 100 thousand to 200 thousand) is the largest source of luxury consumption growth.

"At present, the world Luxury goods The growth rate of consumption can reach two digits in only four countries. Brazil Russia, India and China. Among them, China's growth rate is the highest. Zhou Shaoxiong, chairman of the seven wolf group, told reporters yesterday. The seven wolves announced yesterday that they spent 70 million yuan to buy Hangzhou Kenna Garments Co., Ltd., an agent of international luxury brands.

Hangzhou Kenna is an international luxury brand agent. At present, it has the agency in China of world-class clothing brands such as Connally (Canali), Versace (Versace Collection) and jewellery brand George Georg. There are 15 Canali brand outlets in the country, and 4 Versace top clothing stores. The main business areas are concentrated in the northeast and East China. The acquisition of Hangzhou Kenna by the seven wolves marked the beginning of the official entry into the luxury market of the seven wolves, the main producer of clothing and sales.

"Acquisition of Hangzhou Kenna is of great significance. First, strengthen international brand cooperation; two, seven wolves create international luxury brands to enter the Chinese market agent platform, and the three is to offer seven wolves brand access to the international arena to provide opportunities for communication." Zhou Shaoxiong, chairman of the seven wolves, said that through such cooperation, the seven wolves could provide more opportunities for Chinese consumers to contact with international luxury brands, and the seven wolves will also provide services for more international clothing brands to enter the Chinese market by virtue of their own capital advantages, channel advantages, resource advantages and management experience.

However, it is noteworthy that the acquisition of the seven wolves is not just for its own high-end brands such as "Saint worth" accumulated business experience and high-end retail channels, but rather to focus on the development of international luxury brands in China as a new business segment. Zhou Shaoxiong has no doubt that he is optimistic and ambitious about China's luxury market.

"The international agency business will be the seven wolves as a listed company in the future to focus on the field. In addition to the current brand of agents, the seven wolves will continue to look for other international brands in China, and expand the number of existing brand stores from this year. Zhou Shaoxiong said in response to our reporter's questions. He even said that if the time is ripe, the seven wolves will consider buying foreign luxury brands.

"We will have a series of market expansion plans." Zhang Jianmin, general manager of Hangzhou Kenna, told reporters that the number of Canali outlets will expand from 15 to 18 this year, while Versace's top clothing stores will develop from 11 stores to 4.

In an interview with this newspaper, Zhang Jianmin said that in general, the profit margin of luxury agency industry in China is more than ten percent, and "different brands are slightly different". As a matter of fact, this has no special advantage compared with the main clothing industry of the seven wolves. But Zhou Shaoxiong is very optimistic about the profit prospects of the luxury market. "Kenna's development last year is very good. Now we need to strengthen the management of cash flow. If we cultivate successfully, we believe there will be an outbreak. He said.

Statistics show that as of December 31, 2010, in just two or three years, Kenna apparel achieved operating income of 66373916 yuan, with a net profit of 7844051 yuan.

At present, the biggest risk of this business is that, generally speaking, the international brand agency agreement is signed for five years. If the market changes or the business is not good enough, the brand side may withdraw the agency right. "The key is whether we can create value and see how the business is doing." Zhou Shaoxiong said that luxury agents need a lot of cash in the early stage. And the opening of such stores requires precision and will not expand as quickly as the popular clothing brand.