All economic indicators from China point towards one fact that China is marching rapidly towards becoming the largest luxury market in the world. The rapid growth in demand has brought about a maturity amongst the Chinese luxury consumers. They have become brand conscious and have developed preferences. They are much better informed about luxury brands now and recognize the brands they feel are the best for them. KPMG, the renowned consultants conducted a study on the luxury market in China and have released a report “Luxury experiences in China”.
The report indicates that the French labels are the most sought after by the Chinese consumers. Besides the French luxury brands labels from Italy and Hong Kong are very popular. Nick Debnam, head of consumer markets for Asia Pacific for KPMG explained that the study covered 24 cities and interacted with 1,200 consumers. It is the tier II cities that are producing affluent Chinese in large numbers. According to the rich list released by a local publication Hurun puts the number of Chinese residents worth over 41 million at 875,000. Top 200 out of them are billionaires.
Debnam pointed out that at least 70% of consumers search online for information on luxury brands at least once a month. The luxury brands must get their act together on the net as it will be the key to their future growth in China. The market is becoming more crowded every year and it is harder for luxury brands to enter this space. French cosmetics and perfumes, clothing and bags have taken a dominant share of the market. When it comes to shoes, the Italian brands have an edge. Swiss watches have maintained their lead in the Chinese markets as well. In the field of alcohol the European brands are unable to dislodge the domestic brands. The report concludes that the Greater China region, which includes Hong Kong, Macau and Taiwan, will account for 44 percent of global luxury-goods sales by 2020, compared with 15 percent now.