Luxury shoppers in China are pushing their nation to the top once again as China is set to overtake Japan this year to be the country with the biggest appetite for luxury goods. China’s consumers are expected to keep spending, even if their affluent counterparts in the West don’t.
The reason for China’s continued growth when it comes to luxury demand is, in pat, their culture. Displaying one’s wealth has become a popular trend in China and it is anticipated that this trend will translate into growing purchases of luxury goods, whether for oneself or as a gift. Perhaps somewhat ironically, reports are indicating that consumer habits in China are not always corresponding to income levels, but rather a desire and need to socially fit in and show off wealth, real or perceived.
Additional components potentially fueling the fire behind luxury shopping in China: social changes. People are marrying later, women are becoming more financially independent and brand awareness is on the rise.
China has approximately 1,363 people with wealth of more than roughly $157 million (1 billion Yuan), which is up an impressive 36% from last year. Around 189 of the 1,363 qualify as U.S. dollar billionaires.
In the first half of 2011, China overtook France as the third-largest importer of Swiss watches with a 49% increase over the year-earlier period. In Hong Kong, watch retailers line some streets of upscale neighborhoods and report seeing imports grow 28%.
Jewelry is doing even better than watches – as women become more engaged luxury consumers, the jewelry market has huge potential. There were almost 197 million women between the ages of 30 and 49 in 2009 in China, representing almost 17% of the total population. Local retailers like Luk Fook and Chow Sang Sang join international jewelers like Tiffany in catering to these consumers.
Source: Wall Street Journal