Luxury Goods Will Rise Again In China

Over the past few years, with the Chinese middle class becoming obsessed with high-end fashion and jewelry, many luxury brands from France, Italy and the United States have been booming in China.

But this sales boom is decreasing, and the disappointing results recently released by many Western luxury retailers are clear. Although there are many indications that this slowdown is only temporary.

According to Bain consultancy statistics, sales of luxury goods in China decreased by 1% last year to 115 billion yuan in 2013. The slowdown in China and the government's efforts to combat corruption and gift giving are particularly important for the watch industry, which is also the main reason for the low sales of luxury goods.

French luxury brand Hermes said its watch sales performance fell by 11% last year, largely affected by the shrinking of China's luxury market. The company expects that overall growth in 2015 will remain slow compared with the average level in recent years. Prada's sales in the Chinese market fell by 4% in 2014. It is expected that luxury brands will still face difficulties this year.

However, the famous Hermes, which is famous for its platinum bags and scarves, has been building new stores in China. It opened a few months ago at the new flagship store, Hermes house in Shanghai.

Why is this all the same? Because there is enough data to show that the current China's Luxury goods Sales just encountered a "deceleration zone".

A new study commissioned by Citigroup commissioned by the economist think tank said that in the next five years, the Chinese rich will own two times the assets of the American rich. The report points out that by 2020, the total financial assets of Chinese people who are in the 100 thousand to 2 million US dollars will reach 53 trillion dollars, while the United States will only have 27 trillion dollars.

That is to say, many people would like to go to Prada, Gucci and Tiffany store. Shopping And buy expensive Estee Lauder beauty products. These companies are happy to do so.

We are just expanding our business in China. Latest fashion The company's Michael Kors recently said its sales performance in China "began to stabilize." The company's strong rival, Coach, plans to open several new stores in China, and its sales in China have increased by 13% in the latest quarter. In addition, although the holiday sales figures of Hongkong shops, which are popular with mainland tourists, have not reached the expected sales figures, they are still pushing ahead with the expansion plan in China at full speed.

Other Western companies that are not luxury brands are also ready to play a big role in China. Gap, which owns Old Navy and other brands, plans to open 40 new stores in China this year. Ralph Lauren has seen two digit sales growth in China last year, and now sees China as one of its "most important" markets.

Obviously, for luxury brands and retail executives, the slowdown in China is only a temporary change.

Freda, chief executive of Estee Lauder, said last month that "China's high-end beauty products market is still maintaining high growth in number of units. We see that there are opportunities everywhere, and can enter more cities, create new stores and sales channels, and launch more brand names."