Chinese goods, known for being dirt cheap have flooded global markets. But those affordable products are not what the Chinese have in mind for their own consumption. With an exponential growth in its economy when all the other global markets were reeling due to the economic meltdown, the Chinese now have developed a taste for the luxurious and have the bucks for it as well.
Be it cars or clothes, Chinese consumers rank as the world’s second-largest spenders on luxury items, just behind the United States. A whopping $7.5 billion is approximately what the Chinese spend on luxury products annually and according to Shaun Rein, managing director of China Market Research Group, the market is growing at a respectable rate of 15 percent per year. And not surprisingly, Shanghai, China’s financial capital has emerged as the leading spender.
Tom Murry, president and chief executive of Calvin Klein Inc. told the press that, “It will become the No.1 country in Asia for us in 2010. It will surpass Korea and Japan, our top two countries for the last decade or more.” Numerous big names of the fashion industry such as Dior, Louis Vuitton, Gucci and Ermenegildo Zegna have made their entry into the Chinese market in the past few years.
Being the world’s largest market with a population of 1.3 billion, companies cannot afford not to be here.