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          Top Biz News

          Luxury goods demand may peak by 2015

          By Bao Chang (China Daily)
          Updated: 2010-01-22 07:56
          Large Medium Small

          Move over Japan. China is poised to become the world's largest luxury goods market in the next five to seven years, according to Boston Consulting Group in its latest survey of Chinese consumer trends released in Beijing yesterday.

          "By 2015, 29 percent of global luxury product consumption will come from China, making it the world's largest luxury market," Vincent Lui, principal of Boston Consulting's Hong Kong office, said at a news conference yesterday.

          China, which presently consumes about 25 percent of the world's luxury products, is the second largest luxury goods consumer after Japan, according to earlier reports.

          The survey entitled "China's Luxury Market in a Post Land-Rush Era", surveyed more than 2,550 consumers across the country last year, of which 26 percent said they spent more on luxury items in 2009 than in 2008.

          "Although Chinese consumers may continue to be somewhat cautious in their spending, they still aspire to own luxury brands," Lui told China Daily.

          China's booming luxury goods market makes it an oasis of hope for global luxury brands, which are losing ground in other markets.

          At present, Shanghai and Beijing have as many luxury point-of-sale locations per capita as both New York and Chicago. Plus, the two Chinese cities have a slightly higher concentration of luxury watch outlets than other major city in the world.

          For luxury purveyors, a big part of China's allure is the rapid pace of wealth accumulation.

          At the end of 2008, China boasted 417,000 households each with a net worth of more than $1 million in assets under management, according to research by Boston Consulting and leading Chinese banks.

          Boston Consulting also pointed out that this category is expanding quickly and is expected to top 609,000 households by the end of 2011.

          Related readings:
          Luxury goods demand may peak by 2015 In love with luxury
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          Luxury goods demand may peak by 2015 Chinese luxury purchasers now setting global trends
          Luxury goods demand may peak by 2015 Hangzhou becomes 3rd biggest luxury brand market in China

          Although still small in relation to the overall population of China, the nation's high-net-worth category is larger than that of many affluent countries such as France and the United Kingdom.

          The majority of China's luxury store locations roughly mirrors the distribution of wealth in China, and are concentrated along the coast with Shanghai, as well as Guangdong and Shandong provinces boasting the highest number of wealthy households.

          However, as wealth spreads from the large coastal cities to smaller cities inland, luxury goods retailers have followed in a land rush for key locations in some second-tier cities such as Harbin and Shenyang.

           

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