Hermes Group Is Still Optimistic About The Chinese Market.

Some luxury brands are warning investors about slowing growth in China, but at the same time, France

Hermes International SCA insists on its optimistic outlook based on its slower and more solid expansion plan for its competitors.

Thomas, chief executive of Hermes, said that the Paris luxury brand plans to invest tens of millions of euros in the next five years to develop its high-end Chinese brand "up and down" Patrick Thomas.

Thomas said that it also planned to increase from the current 17 to 25, but the deadline he gave is 10 years.

Thomas said in an interview in Beijing on Monday, "we have not and will not increase stores like other brands in the past, otherwise there will be a risk of mediocrity."

"Up and down" stores sell costumes, jewelry and furniture inspired by Chinese elements at a price of up to 620 thousand yuan (US $99 thousand).

Thomas said that outside the Shanghai store, there will be a new "up and down" store in Beijing this week, and plans to open another store in Paris in 2013.

Many companies catering to the needs of the rich have warned in recent months that China's economy is slowing down.

The industry may be losing its shine.

Burberry Group, a British fashion brand with more than 60 stores in China, warned last month that global demand was weak and sales slowed and profits declined, and its share price declined.

Day Beers (De Beers), the world's largest diamond producer, said in September this year that China's demand for its jewelry slowed down, causing its sales growth to fall to 10% this year, down from 20% last year.

Daimler AG issued an early warning last month that its Mercedes Benz (Mercedes-Benz) subsidiary will be unable to achieve its profit targets this year and demand will weaken next year.

One of the reasons given by the company is fierce competition in the Chinese market.

The slowdown in high-end commodity spending is largely due to China's slowing economic growth.

In addition, the 10 year leadership change will be suspended next month, as everyone is waiting to see which politicians deserve their luxury gifts.

Yu Yale, an analyst at CLSA Asia-Pacific Markets, a brokerage firm, said that luxury companies also seem to have lost their stamina, partly because many of them have been expanding rapidly across China.

He said that the growth rate of 65% in the past few years will come from the expansion of stores, which is bound to slow down.

In 2008, Hermes purchased a majority of the "upper and lower" shares to cater for those consumers who value Chinese traditional aesthetics and are willing to spend 280 thousand yuan (US $45 thousand) to buy a set of lacquer gold and bamboo button porcelain.

Thomas said that sales of goods such as Birkin, which was priced at $70 thousand, had hardly declined, but the brand marketing model began to turn from a product that was popular with Hermes in a few years ago to a softer brand logo.

Hermes is expanding three stores in existing stores in China and will open a new store in China later this year.

Thomas said that Chinese consumers want quality, not just that.

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When asked to give a few examples of this change, Thomas said that some luxury brands began to go downhill, and we did not.

Jiang Qionger, founder of "up and down", says that Chinese consumers are increasingly seeking objects that convey their values and can be passed on to future generations.

Jiang Qionger is holding a three week exhibition in Beijing, where consumers can see the craftsmen laying gold thread on porcelain tea sets and touching the rosewood archaize worth 620 thousand yuan.

Thomas said last year's sales accounted for 2% of Hermes's sales in China, but he expects this proportion to rise.

He said, we expect that "up and down" will become an engine of growth in the future.

He also said that the brand is likely to make profits in three to five years.