CHINA LUXURY GOODS GROW FASTEST

The world’s largest luxury brands achieved sales of US$214b in full year 2013 with China based luxury firms posting the highest growth.

Seven of the top 100 were Hong Kong or China based companies and they were responsible for over 11% of sales.

Most of the brands will be unknown to western consumers including Hong Kong’s Chow Tai Fook, a Jewellery brand which achieved sales of around $10b,

Other brands included Lao Feng Xinag, Chow Sang Sang, Luk Fook and Zhejiang Ming.

I have writing for a while now about the Chinese fascination with brands of all types but in particular, luxury brands. In a culture where status is important the right brand makes the right statement about the consumer. It is interesting that recently Samsonite have chosen to reduce prices in China to drive sales in the face of stiff local competition and hesitant shoppers holding back on spending as the economy shrinks.

In my travels I have seen queues outside the major international luxury fashion boutiques, though these are notably shorter nowadays, and more often increasingly none existent in the face of a sharp review of wealth as the economy shrinks, but the demand for domestic luxury brands is new.

Conventional wisdom was that Chinese consumers demanded iconic luxury western brands as only they had the tradition and prestige to convey real status. The Chinese are learning how to create and market luxury brands and Western brands need to take note. There will be a short intermission whilst these luxury focused domestic brands create a foothold in their home country. There will then be a flood out from China to the West. In the US and Europe we would do well to look East to the next wave of competitors who are serious about global market share and to change the perceptions of brand china being seen as low cost and low quality.