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    Next Year, China'S Luxury Consumption Growth Will Slow Down.

    2011/12/16 10:32:00 19

    Slowdown In Luxury Consumption Next Year

    In recent years, the explosive growth of China's luxury market will slow down for the first time next year.

    Yesterday, Bain partners Bruno said in an exclusive interview: "the consumption growth of China's luxury market has slowed down in the fourth quarter of this year.

    Compared with the rapid growth in 2010 and 2011, it is estimated that next year China

    Luxury goods

    The pace of market growth will slow down to around 20%.


    In Bruno's view, although the luxury market in China is showing a thriving scene, there is still some uncertainty in the overall good business environment. The major brands are cautiously optimistic about the prospects of China's luxury market.

    attitude


      

    increase

    Saturation?


    According to a report released yesterday by Bain, a world-renowned strategy consulting firms, the scale of China's luxury goods market in 2010 reached 87 billion 100 million yuan, an increase of 27% over 2009 and fifth in the world.

    The overall growth rate in 2011 is expected to reach 25%~30%, but the growth rate has slowed down in the fourth quarter of 2011.


    Lu Xiaoming, the former managing director of MontBlanc (China) Limited, told the newspaper that "2012 may be a winter, and the future development of China's luxury market may slow down."


    Analysis of the reasons, Lu Xiaoming believes that China has now become the largest market for many luxury brands, and can not grow faster than before. At the same time, the consumption of many two or three line cities has been pre paid in advance in the first tier cities.


    Rhodes, vice president of public relations, who advising a number of first-rate luxury brands, told the newspaper: "judging from the input of consumer sentiment and major brands in the Chinese market, the Chinese luxury market will definitely increase, but I do not think that the growth rate will continue to be so optimistic."


    According to media reports in Hongkong, Zhou Dafu, chairman of the jewelry market, which was listed yesterday at the lowest price limit of HK $15, said Zheng Jiachun's growth in the second half of the year will slow down compared with the first half of the year, due to the uncertain impact of the international financial environment.


    Bain's 2011 China luxury market research shows that in 2010, the total consumption of luxury goods of Chinese consumers reached about 212 billion yuan, and the consumption of luxury goods in Greater China, including Hong Kong and Macao, ranked among the top three in the world, amounting to 159 billion 500 million yuan, ranking only after the us and Japan.


    Among them, gift giving has become an important part of China's luxury consumption, the proportion has reached about 25%.

    But Lu Xiaoming sharply pointed out: "China's luxury consumption is mostly from public consumption, and this growth is not healthy and uncertain."


    Bain also pointed out that the introduction of prepaid regulatory opinions is intended to curb corruption. The uncertainty of these government regulatory policies is an influential factor in China's luxury consumption.


    In addition, more stringent quality standards and procedures for imported products may delay the introduction of luxury brand new products into the Chinese market.


    Turning to improve store performance


    In the past, the strong growth of China's luxury market was driven by the aggressive expansion of major brands in China.

    But Bain also found that some brands slowed their expansion in 2011.


    Data show that in 2009, there were 150 new luxury stores in China and 160 new outlets in 2010.

    By the end of September 2011, luxury brands had about 90 stores in Huaxin.


    "We are consciously slowing down the pace of expansion because we have built up a good brand awareness and are more critical about the location of new stores," said a luxury brand PR director.


    Referring to the reasons for the slowdown, Bruno analyzed: "some brands made plans to reduce investment during the financial crisis. They consciously slowed down the pace of expansion, and instead focused on improving the performance of the stores. With the growing maturity of Chinese consumers, the service quality of the stores was more valued. Moreover, the shortage of talent and the rising cost of labor were still the main obstacles to store expansion, especially in the two or three tier cities."


    Under the influence of these factors, industry experts pointed out: "many brands began to pition from the" glancing "stage to upgrading the store performance.

    But the development of Chinese luxury brands in China is not smooth sailing. As the Chinese Consumers Association said to Bain, "complaints about after-sales service for major brands have increased, mainly around after-sales service, which is complex and time-consuming.

    Many brands have not yet set up a customer service hotline in China.


    More mature Chinese consumers demand equal and more personalized services in all parts of China (including purchase and after sales).

    Bruno suggested: "luxury brands should ensure adequate training and tracking and incentive mechanisms to provide customers with more professional services."


    In addition, surging e-commerce and social media also pose challenges to the development of luxury brands in China.

    With more and more luxury brands exposed to social media's attention, the risk of public relations crisis is also increasing.


    At the same time, it is hard for the major brands to attract consumers online and maintain the high-end image and shopping experience of luxury goods.

    Bruno stressed: "luxury brands should be very careful in choosing the media and forms of marketing, and actively monitor and manage potential public relations crises to avoid overexposure."

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