Luxury Market Tight in China

by Nicole Weston (RSS feed)
Jan 4th 2007 at 10:02AM

Are luxury retailers too optimistic about the opportunities in China? As the economy rapidly grows, retailers are faced with rising costs for labor and rent and a customer base that is more reluctant to purchase luxury items than in other countries. Many high end brands - Cartier, Louis Vuitton, Chanel and Hermès, to name but a few - are all in competition for the same small segment of the population. While that doesn't sound so different from the way the retailers operate in other parts of the world, there is on big difference. In China, consumers are primarily interested in things that are "obvious status symbols," with easily visible logos from only the top brand, so many companies, even big name ones, are barely breaking even after years in the country.

But the segment of the population that can afford luxury is growing and as the country moves more towards a market economy, they grow more willing to purchase such goods. The lesson to retailers? Start small and learn the market. It's probably only a matter of time before more consumers start to want to add some luxury to their lives.

Tags: brand, china, chinese, louis vuitton, luxury, luxury brands, market, retail

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Reader Comments (Page 1 of 1)

Samsung Toner Refill Jan 4th 2007 12:06PM

This is really kinda funny. I've been to china several times and this is just crazy. Why would the people that live in the country where almost all of the "brand name" products are really knock-offs by the higher priced original? It's all a waste of money to me.