Luxury brands in China – additional information
With growing economic power and global influence, China has become an attractive target for the international luxury market. A sevenfold growth in luxury sales revenue to around 74 billion Euros was predicted for China by 2020, owing to a rising number of high net worth individuals and affluent households. Increasing disposable incomes and continued urbanization have also contributed to the consumption boom. Social perception of luxury goods mainly evolves around their value as status and wealth symbols, presenting a powerful incentive even for people with limited income to save up money in order to afford luxury goods.
High-profile brands such as Gucci, Armani and Louis Vuitton can be found in almost any large city in China. The German fashion house Hugo Boss did not enter the Chinese market until 2006. During several years of rapid expansion in China, more than 130 directly-operated Hugo Boss stores had been established by 2013. When compared to other sales channels, such as franchising or selling through partners, company-managed stores leave luxury brands with more control over store design and product marketing.
In terms of the regional distribution of luxury stores, the majority are located in Beijing and Shanghai. As the country’s capital city, Beijing is not only home to many government and military institutions, but also media agencies and technology companies. Employees of those organizations often turn out to be brand-conscious consumers. Shanghai has long been recognized as the open and westernized fashion capital of China. Both locations are regarded as cities with the largest luxury market potential.