China's Luxury Market - Losing Sheen? | Articles and PublicationsAranca
The growth in China’s luxury market has slowed from 7% in 2012 to around 2% in 2013. China’s domestic luxury market is losing its luster. Aranca highlights the reasons behind the recent slowdown in growth.
A weak currency, strong ant-corruption reforms, and stiff luxury taxes are forcing global luxury brands to rethink their expansion plans in one of the world's fastest growing consumer economies.
The growing fascination over the Chinese market is felt in almost all industries around – especially within the luxury sector. Study after study reveals that China is an important market that luxury brands shouldn’t – and couldn’t – ignore. However, confronting the realities on the ground could be challenging, albeit necessary for a brand to truly succeed in this market. What are the types of Chinese millionaires? Where do they live? How do they make their purchase decision? Take a look and find out.
Russian products & cultural exports in China by daxue consultingDaxue Consulting
Russia and China have a long history of trade relations. After Western sanctions against Russia in 2014, Russia introduced a new approach to the foreign policy – “Pivot to Asia”. As a result, China has become Russia’s largest export country for agricultural products. In 2019 the Chinese market for Russian products hit a record of over $107 billion US. The same year Russian President Vladimir Putin set a task to increase trade with China to $200 billion US in 2020. Ranging from minerals to food products, the market for Russian products in China is now bursting with potential.
A comprehensive report about Russian goods exports in China is offered by daxue consulting, a China-based market research firm.
A short market which is about:
- Luxury market overview in Asia,
- Luxury brands in China: in the path of e-commerce, social media and mobile,
- Marketing: where is influence?
- Luxury Brands: how do they perform on social media & Influence?
China's Luxury Market - Losing Sheen? | Articles and PublicationsAranca
The growth in China’s luxury market has slowed from 7% in 2012 to around 2% in 2013. China’s domestic luxury market is losing its luster. Aranca highlights the reasons behind the recent slowdown in growth.
A weak currency, strong ant-corruption reforms, and stiff luxury taxes are forcing global luxury brands to rethink their expansion plans in one of the world's fastest growing consumer economies.
The growing fascination over the Chinese market is felt in almost all industries around – especially within the luxury sector. Study after study reveals that China is an important market that luxury brands shouldn’t – and couldn’t – ignore. However, confronting the realities on the ground could be challenging, albeit necessary for a brand to truly succeed in this market. What are the types of Chinese millionaires? Where do they live? How do they make their purchase decision? Take a look and find out.
Russian products & cultural exports in China by daxue consultingDaxue Consulting
Russia and China have a long history of trade relations. After Western sanctions against Russia in 2014, Russia introduced a new approach to the foreign policy – “Pivot to Asia”. As a result, China has become Russia’s largest export country for agricultural products. In 2019 the Chinese market for Russian products hit a record of over $107 billion US. The same year Russian President Vladimir Putin set a task to increase trade with China to $200 billion US in 2020. Ranging from minerals to food products, the market for Russian products in China is now bursting with potential.
A comprehensive report about Russian goods exports in China is offered by daxue consulting, a China-based market research firm.
A short market which is about:
- Luxury market overview in Asia,
- Luxury brands in China: in the path of e-commerce, social media and mobile,
- Marketing: where is influence?
- Luxury Brands: how do they perform on social media & Influence?
La dernière étude de PwC « 2015-2016 Outlook for the Retail and Consumer Products Sector in Asia » révèle que les volumes des ventes dans les secteurs de la distribution & des biens de consommation en Asie-Pacifique devraient croître de 4,6% cette année.
Private Label Clothing Brands in China | Daxue Consulting Daxue Consulting
China’s apparel market remains one of the fastest growing markets in the world, and the rise of e-commerce as well as fast fashion have further encouraged its growth.
As the quality in China’s apparel industry varies greatly, private label brands may be the solution addressing a growing consumer segment in the market.
Goldstein Research analyst forecast the Middle East luxury watches market to expand at a CAGR of 6.5% during the forecast period 2017-2025. Moreover, the market is projected to reach USD 510.0 million by 2025 owing to increase in international travel and the growing importance of the millennial consumers.
How can businesses keep up with the rapidly growing Chinese economy while at the same time conquering the rest of the Asian market? This white paper explores customer support as the solution that bridges companies to Chinese-speaking customers.
Insights of Brazilian Luxury Market is a presentation of some characteristics of the Luxury Market in Brazil. Besides, it presents an explanation of the Fashion Luxury.
In the last part of the presentation, you can find an explanation about marketing and finance interface in luxury market, as well as an explanation about the main characteristics a CFO must have in order to work in a luxury company. Actually, it is the subject of my Phd thesis.
Sell to China - Your Complete Category HandbookAzoya
Chinese consumers’ rising needs for overseas products have provided overseas retailers with a wealth of opportunities. However, these opportunities are not evenly distributed among all categories. Some categories are more popular; some are easier to operate; some need to be given extra attention.
This whitepaper takes a deep dive into different categories that are popular among Chinese cross-border online shoppers. Suggestions about marketing, merchandising, logistics and operation will be given based on different categories. You can't miss this all-encompassing handbook!
The China cosmetics market registered an impressive growth of XX% in 2017 with huge growth prospects all over the country. The total cosmetics market in China is valued at USD XX billion in 2017 and is anticipated to reach a market size of USD XX billion by 2025. Chinese women are splashing out more on beauty products, and at an earlier age than ever. As increasingly sophisticated consumers, they are pushing an already enormous global industry to new heights and reinforcing the rise of Asian-born companies in the sector.
Weak currency, strong anti-corruption reforms, and stiff luxury taxes are forcing global luxury brands to rethink their expansion plans in one of the world's fastest growing consumer economies. Read more from Aranca's Investment Research Experts here.
La dernière étude de PwC « 2015-2016 Outlook for the Retail and Consumer Products Sector in Asia » révèle que les volumes des ventes dans les secteurs de la distribution & des biens de consommation en Asie-Pacifique devraient croître de 4,6% cette année.
Private Label Clothing Brands in China | Daxue Consulting Daxue Consulting
China’s apparel market remains one of the fastest growing markets in the world, and the rise of e-commerce as well as fast fashion have further encouraged its growth.
As the quality in China’s apparel industry varies greatly, private label brands may be the solution addressing a growing consumer segment in the market.
Goldstein Research analyst forecast the Middle East luxury watches market to expand at a CAGR of 6.5% during the forecast period 2017-2025. Moreover, the market is projected to reach USD 510.0 million by 2025 owing to increase in international travel and the growing importance of the millennial consumers.
How can businesses keep up with the rapidly growing Chinese economy while at the same time conquering the rest of the Asian market? This white paper explores customer support as the solution that bridges companies to Chinese-speaking customers.
Insights of Brazilian Luxury Market is a presentation of some characteristics of the Luxury Market in Brazil. Besides, it presents an explanation of the Fashion Luxury.
In the last part of the presentation, you can find an explanation about marketing and finance interface in luxury market, as well as an explanation about the main characteristics a CFO must have in order to work in a luxury company. Actually, it is the subject of my Phd thesis.
Sell to China - Your Complete Category HandbookAzoya
Chinese consumers’ rising needs for overseas products have provided overseas retailers with a wealth of opportunities. However, these opportunities are not evenly distributed among all categories. Some categories are more popular; some are easier to operate; some need to be given extra attention.
This whitepaper takes a deep dive into different categories that are popular among Chinese cross-border online shoppers. Suggestions about marketing, merchandising, logistics and operation will be given based on different categories. You can't miss this all-encompassing handbook!
The China cosmetics market registered an impressive growth of XX% in 2017 with huge growth prospects all over the country. The total cosmetics market in China is valued at USD XX billion in 2017 and is anticipated to reach a market size of USD XX billion by 2025. Chinese women are splashing out more on beauty products, and at an earlier age than ever. As increasingly sophisticated consumers, they are pushing an already enormous global industry to new heights and reinforcing the rise of Asian-born companies in the sector.
Weak currency, strong anti-corruption reforms, and stiff luxury taxes are forcing global luxury brands to rethink their expansion plans in one of the world's fastest growing consumer economies. Read more from Aranca's Investment Research Experts here.
Luxury and Cosmetics Market and Consumer Trends Chris Cadden
"Increase the digital effort — Luxury companies are behind in an increasingly digital world. New technology has changed the way companies do business, providing new communication channels, with buying behaviors evolving and the emergence of a new segment, the “millennials.” Immediacy is key, so there is a constant need to innovate within the digital world, which seems to contrast with the exclusivity known for its pole position at the core of the luxury market. Luxury brands have to manage dual aspects; namely to maintain their heritage and create long-term value while responding to consumers’ expectations and trying to offer instant gratification. Without innovation companies are risking losing ground to more dynamic, digitally savvy players." -Roberto Bonacina
Why the Chinese market represents an economic opportunity for Italian operato...MTM IULM
Professor Alastair Morrison, Distinguished Professor Emeritus and ITSA President, presents tourism operators 9 excellent reasons to start business in China, 5 challenges to face and 8 reccomandations in order to succeed.
#graduationMTM8
www.mtm.iulm.it
Fashion Trends and Brand Opportunities in ChinaTechnomic Asia
Presentation given by Michael Zakkour @michaelzakkour at Fashion Institute of Technology on Oct 3 - China Fashion, Beauty and Status A Year on the Frontlines of China's Apparel and Luxury Market.
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China Luxury
Goods
2. China Luxury Goods
The global luxury goods
sector has continued to
soar to post-crisis heights
in 2012, with its third year
of double-digit growth.
Globally, luxury goods sales
(includes apparels, acces-
sories, footwear, jewelry,
leather bags, cosmetics and
perfumes) is anticipated to
reach EUR 320 Billion by
the end of 2017, with a
CAGR of around 9% during
2013-2017.
Spending by Chinese con-
sumers on luxury products
is growing tremendously,
making it second largest
luxury market in the world
after Japan. China has
become the paramount
driver of growth in this
sector, with purchases by
Chinese both at home and
abroad accounting for over
7% share in global sales
in 2012 which anticipated
to 8% share by the end of
2017.
Source: RNCOS
Source: RNCOS
Figure-2: Global - Personal Luxury Goods
Market (Billion EUR), 2010-2013 & 2017
Figure-3: Share of China in Global Luxury
Goods Sales (2012 & 2017)
320
225
210
190
172
2010e 2011e 2012e 2013e 2017f
Overview
37.0%
12.5% 6.5%
5.0%
9.0%
30.0%
Europe
Americas
Asia-Pacific
Japan
China
Rest of the World
33%
13% 8%
5%
9%
32%
Europe
Americas
Asia-Pacific
Japan
China
Rest of the World
3. China Luxury Goods
Personal luxury goods sales
in China estimated to reach
around EUR 15 Billion in
2012 with around 12%
luxury consumption growth
y-o-y in 2012, down from
30% in 2011. The slow-
down was partly attribut-
able to a weaker economic
growth in China, as well as
the growing trend of shop-
ping luxury goods abroad.
Besides that, the recent ban
on spending public funds
on luxury items for gifting
might also have a negative
impact on luxury sales in
China. Moreover, the per-
sonal luxury goods market
in China is anticipated to
reach around EUR 18 Bil-
lion till 2017 with a CAGR
of more than 6% during
2013-17.
In 2012, it is estimated that
overseas consumption of
luxury goods accounted for
around 60% of the total
Chinese luxury spending,
with watches, jewelry and
leather goods winning
the top spots. In domestic
market, among the major
product categories, the y-o-
y growth rates of cosmetics
and personal care products,
women’s wear and mens-
wear were more resilient in
2012. Watches and jewelry,
on the other hand, saw
a notable growth decel-
eration in 2012 which is
expected to decline further
on the account high taxes.
Share of Luxury Goods Market by Product
Category (2012 & 2017)
Source: RNCOS
Figure-4: Personal Luxury Goods Market
(Billion EUR), 2010-2013 & 2017
18.0
15.0
14.8
13.0
10.0
2010e 2011e 2012e 2013e 2017f
Market Size and Growth Rate
30%
14%
Watches
Cosmetics, Perfumes & Personal Care
Leather Bags
Menswear
Jwellery
Footwear
Womenswear
Accessories
10%
7%
5%
5%
6%
23%
Source: RNCOS
30%
Watches
Cosmetics, Perfumes & Personal Care
Leather Bags
Menswear
Jwellery
Footwear
Womenswear
Accessories
14%
10%
7%
5%
5%
6%
23%
4. China Luxury Goods
Opportunities & Challenges
Opportunities
• Rising number of affluent consumers which are just attaining middle-class status is in-
creasing at an explosive rate as incomes head upward.
•
• Ongoing urbanization and rising luxury demand in smaller cities.
• Opportunities due to economic slowdown in European countries as many luxury brands
are now focusing on Asian market (especially China) to compensate for the loss.
• A surge in the number of credit card users is likely to stimulate immediate consumption
of luxury goods. According to China Banking Association, in 2011, China’s credit card
transactions totaled CNY 7.75 Trillion, up 48% yoy; the number of credit cards issued was
285 Million, up by 24.3% yoy. MasterCard forecasted the number of credit cards in China
to reach 900 Million by 2020.
CAGR
14.22% 5310
3120
2690
2320
1890
2010 2011 2012 2013e 2017f
Figure-1: Per Head Personal Disposable Income (US$), 2010-2013 & 2017
Source: EIU
5. China Luxury Goods
Challenges
• As part of the anti-corruption campaign,
in July 2012, the State Council promul-
gated the Regulations on the Affairs and
Administration of the Government Agen-
cies effective 1 October 2012. According
to the regulations, government agencies
are prohibited from purchasing luxury
goods.
• The high costs of luxury goods in China
is mainly due to stiff government taxes,
which leds the consumner to make pur-
chases abroad.
• Digitally challenged online retailing market is also a challenge to the luxury market in the
country as over two-thirds of Chinese use the internet to research brands, but most luxury
firms have pitiful digital strategies.
• Increasingly sophisticated consumers shifting from overexposed logo brands to absolute
quality products.
Category Consumption tax Import tariff
Cosmetics 6.5%-150%
Jewelry and precious stone 5%-10% 0%-130%
Luxury watches 20%
30%
11%-100%
Table-1: Consumption tax and import tariff on selected luxury products (2012)
Source: China Customs
6. China Luxury Goods
In future, despite the cooling in the growth rate of Chinese luxury spending, the demand of luxury
goods is anticipated to remain robust on the back of rising number of very wealthy consumers, who
have a marked tendency to trade up to more expensive and more luxurious products. At the same time,
new entrants into the luxury category which are just attaining middle-class status are also increasing at
an explosive rate as incomes head upward.
Further, a rapidly-growing share of Chinese luxury shoppers are doing their purchasing abroad which is
expected to rise in future. Although Hong Kong and Macau rank among their favored shopping destina-
tions, now Europe is also rising quickly in popularity. Increasing foreign travel by Chinese is one impor-
tant reason for this trend; so is the fact that luxury goods are not nearly as expensive overseas as they
are in the Mainland, where the government imposes stiff taxes on such goods.
To overcome this problem, the government of China is going to soon slash import duties on opulent
items to encourage wealthy local shoppers to buy more pricey cosmetics, watches and liquor. The move
will encourage shoppers to shop more in the domestic market than to abroad.
Future Outlook
7. China Luxury Goods
China’s luxury goods market is largely dominated by foreign players. Most Chinese luxury consumers
tend to favor foreign brands that have long history and unique brand heritage.
To further expand their brand portfolio and increase their presence in the China market, some foreign
luxury retailers are looking for opportunities to invest in local luxury companies that have strong identity
and growth potential.
For instance, in December 2012, French luxury group, PPR acquired a majority stake in Qeelin, a Chinese
fine jewelry brand. And earlier in February 2012, L Capital Asia, a private equity fund financed by the
French luxury giant LVMH, acquired a 10% stake in Ochirly, one of the top fashion brands in China. L
Capital Asia also co-invested with the Chinese apparel company Xin Hee Co., Ltd. in a mid-priced ap-
parel brand QDA, and its first store was opened in Beijing in March 2013.
Key Players
Recent Developments
• Louis Vuitton has initiated a grand strategy for Beijing with its new store. With this new store, the
company is taking a step further and providing adapted shopping experience and service for its
sophisticated clientele.
• Prada, the Italian fashion house, is expanding to smaller Chinese cities as its global growth slows.
• Prada SpA’s first-half 2013 sales growth fell to a third of 2012’s as China luxury demand cooled
amid a slowdown in the world’s second-largest economy.
• Giorgio Armani’s operating profit rose 20% in 2012 as the Italian fashion retailer expanded its retail
network and continued to develop its presence in China. The company had begun a push into
China and other parts of Asia well before an economic slowdown hit Europe.
• Emporio Armani banks on watches and jewelry rebound In China. Following the grand opening of
its first Hong Kong flagship exclusively for watches and jewelry in February 2013, Giorgio Armani
diffusion line Emporio Armani is setting its eyes on the Mainland.
International Luxury Players
• Burberry
• Dior
• Louis Vuitton
• Chanel
• Hugo BossHermes
• Gucci
• Tiffany & Co.
• Armani
• Prada
• Fendi
Domestic Luxury Players
• NE-TIGER
• Shanghai Tang
• Qeelin
8. China Luxury Goods
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