The increasing demand for luxury goods can be traced back to two important factors. Firstly the transition of China from a planned economy to a market economy and the opening of borders to foreign trade in 1978 have allowed luxury brands to penetrate the Chinese market. Secondly, this reform of the Chinese economic system has brought about a huge leap in terms of the purchase power within the last 30 years, with the highest boom beginning in the 1990s. As a result of these factors, the Chinese luxury market was worth over $9.4 billion by 2010, which accounts for 27.5% of the world's luxury goods market (Datamonitor, 2010).
Moreover, despite the economic crisis, the demand for luxury goods in China has not declined and sales grew by 30% in 2010. Thereby, in 2010 China has succeeded to bypass Japan as the second luxury market in the world after the United States. In addition, the Chinese market currently represents the world's largest market with 1.3 billion consumers (Xiao Lu, 2011). Looking at the future, it is predicted that the luxury sector in China will continue to grow both in terms of demand and sales: annual growth in demand is estimated at 20% (Degen, 2009), while Datamonitor (2010) predicts that the Chinese luxury goods market will be valued at $14.6 million by 2015. This arises in great part from greater income levels and the changing consumption attitudes of the Chinese customers who place less emphasis on collectivity than in the past, while focusing more on personal success and individuality.
[...] Therefore, as the Chinese consumer possesses greater purchasing power, the demand for luxury sector goods is on the rise. In addition, the target market for luxury goods is greatly expanding as today luxury goods are no longer appreciated only by the “traditional” Chinese luxury shopper – typically a male, over 35 years of age who hold a senior position. On the contrary, many varying consumer segments which did not necessarily exist before are also giving their preference to luxury goods. [...]
[...] Bibliography 1) Cavender B., Rein S., Luxury Goods : Still Strong Sellers, China Business Review, March-April 2009 2) Datamonitor, Chinese appetite for premium products growing despite slowing economic activity, June 2010 3) Debnam N., Svinos G., Luxury brands in China, KPMG – TSN report, Monash University of Business and Economics, 2007 4) Degen R., Opportunity for Luxury Brands in China, IUP Journal of Brand Management, Vol. VI, Nos. 3 & 4, 2009 5) Fang T., Negotiation : Chinese style, School of Business, Journal of Business and Industrial Marketing, 2006 6) Faure G. [...]
[...] Luxury goods in China The increasing demand for luxury goods can be traced back to two important factors. Firstly the transition of China from a planned economy to a market economy and the opening of borders to foreign trade in 1978 have allowed luxury brands to penetrate the Chinese market. Secondly, this reform of the Chinese economic system has brought about a huge leap in terms of the purchase power within the last 30 years, with the highest boom beginning in the 1990s. [...]
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