Luxury Goods in China

In: Other Topics

Submitted By beamich
Words 1351
Pages 6
GENERAL FRAME

Since Deng Xiaoping's “Open Doors Policy” (改革开放) in 1978, China has been consistently achieving significant economic growth which has been constant at an average of 10% for the past 35 years or so.

Today China became the largest exporter, the largest manufacturer and the second largest importer and economy in the world (only right after the USA).

With the increase of GDP, the consumption of luxury goods, and therefore the growth of the luxury market, also increased, and increased to the point that China is now among the top nationalities in terms of total sales of luxury goods.

In recent years, as a consequence of the increasing of personal wealth, the consumption of luxury goods in Mainland China has been growing, until last year, 2014, when the sales decreased to 15 billion euros (negative growth you -2%) due to three main reasons:

the first one the slowing of Chinese economy;

the second the tendency of Chinese people to purchase products either abroad or via cross border online platforms since the taxes on the products are lower than in their country;

and the last one the government's anti-corruption drive (started two years earlier, in 2012) Regarding this point it is interesting to notice how this particular fact mainly affected the men watches sector, which recorded negative yoy growth rates of -13% (gift giving concept: probably the most popular gift for men).

BUT...

Nevertheless the small decrease in consumption, the luxury market is still going strong, and the purchase of luxury goods is in the hands of two big groups: wealthy individuals (being them millionaires/billionaires) and upper middle-class individuals (or white-collar workers). The number of both these two categories is growing year by year and economists predicted that it will reach extremely high levels by 2022.

FEATURES OF CHINESE LUXURY MARKET

So now the…...

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