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Luxury shoppers see no crisis
By Bonnie Cao |
May 11, 2009, Monday
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Print Edition
Print Edition
CLUTCHING shopping bags from Vivienne Westwood, Dior and Alexander McQueen, 29-year-old Zhao Bing prowled an upscale department store.
"Is there a financial crisis in China? I don't think it has affected my life very much," said Zhao, who spent 7,000 yuan (US$1,000) in 90 minutes at Lane Crawford in Beijing on what she said was a twice-monthly shopping spree. "I still buy those big brands, anyone you could think of."
Some well-heeled Chinese shoppers such as Zhao, a film technician who gets an allowance from her parents on top of her salary, are spending freely during the global economic crisis.
High-end designers and luxury retailers are looking to them to drive sales as demand in other countries collapses.
China's US$8 billion luxury market accounts for just 3 percent of global sales, but China and Brazil will be the two fastest-growing luxury markets in the next four years, according to consulting firm Bain & Co. China's sales of designer clothing, jewelry and other goods would climb 7 percent this year while worldwide revenue could fall 10 percent, it said.
Just as more mainstream brands such Starbucks and KFC are expanding fast in China, higher-end brands such as Salvatore Ferragamo and Gucci are adding stores here while other retailers postpone or limit expansion in other countries.
"The China market is growing fast. Beside the global downturn which affects every country, China is quite stable," Michele Norsa, chief executive of Salvatore Ferragamo SpA, said. Ferragamo plans to add seven to eight China stores this year alone.
Gucci says its sales in China soared 42 percent last year compared with 2007, 10 times its global growth rate.
China's luxury shoppers are young, many of them self-employed or part of a growing professional class. According to consulting firm McKinsey & Co, 80 percent are under 45, compared to 30 percent in the United States.
By 2015, China will have more than 4 million households with an annual income above 250,000 yuan, McKinsey says, making it the world's fourth-largest country in terms of numbers of households with substantial purchasing power after the US, Japan and Britain.
"Is there a financial crisis in China? I don't think it has affected my life very much," said Zhao, who spent 7,000 yuan (US$1,000) in 90 minutes at Lane Crawford in Beijing on what she said was a twice-monthly shopping spree. "I still buy those big brands, anyone you could think of."
Some well-heeled Chinese shoppers such as Zhao, a film technician who gets an allowance from her parents on top of her salary, are spending freely during the global economic crisis.
High-end designers and luxury retailers are looking to them to drive sales as demand in other countries collapses.
China's US$8 billion luxury market accounts for just 3 percent of global sales, but China and Brazil will be the two fastest-growing luxury markets in the next four years, according to consulting firm Bain & Co. China's sales of designer clothing, jewelry and other goods would climb 7 percent this year while worldwide revenue could fall 10 percent, it said.
Just as more mainstream brands such Starbucks and KFC are expanding fast in China, higher-end brands such as Salvatore Ferragamo and Gucci are adding stores here while other retailers postpone or limit expansion in other countries.
"The China market is growing fast. Beside the global downturn which affects every country, China is quite stable," Michele Norsa, chief executive of Salvatore Ferragamo SpA, said. Ferragamo plans to add seven to eight China stores this year alone.
Gucci says its sales in China soared 42 percent last year compared with 2007, 10 times its global growth rate.
China's luxury shoppers are young, many of them self-employed or part of a growing professional class. According to consulting firm McKinsey & Co, 80 percent are under 45, compared to 30 percent in the United States.
By 2015, China will have more than 4 million households with an annual income above 250,000 yuan, McKinsey says, making it the world's fourth-largest country in terms of numbers of households with substantial purchasing power after the US, Japan and Britain.
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