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Luxury brands in China: China’s love affair with luxury

Andrea Divirgilio / March 28, 2012

China’s role in the global luxury market is becoming more significant year by year, as wealthy elites in China shows growing appetite for high-end fashion and luxury brands. It is continuing its march towards becoming the largest luxury market in the world, as the Chinese uber-rich wants to pamper themselves with the experience of luxury goods, also boasting their purchasing power as well. As the country’s business landscape became more open and transparent, many luxury brands have fully acquired their retail operations in China’s developed cities, including Shanghai, Beijing and Guangzhou. The fast-growing China surges to become top expansion priority, and dozens of world’s most notable luxury brands, including Salvatore Ferragamo, Louis Vuitton, Neiman Marcus and Hermes to name a few, are extending its presence to chase Chinese consumers at home and abroad. Further, the luxury brands are heavily using different digital strategies to build up their retail presence. Though, the brand recognition among Chinese consumers is continuing to rise, but with time, it is becoming more difficult for these brands to mark their individual presence. Here, we have listed some of the notable brands that stand apart in terms of its presence, and are extending its business in the country.

Luxury Brands in China

1. Neiman Marcus

The American luxury retail chain, Neiman Marcus is not entering China’s luxury market by opening a flagship store; rather, it will invest $28 million into privately-owned Glamour sales Holding, which operates successful flash sales websites in Asia. A new e-commerce website will be developed in collaboration with this Hong Kong based partner, and by the end of 2012; Neiman Marcus has plans to start the site in the country. Neiman Marcus believes that with their vast experience and history of success in fashion and luxury, e-commerce, and customer service, combined with Glamour Sales’ in-depth understanding of the Chinese luxury retail market, will help present themselves with a unique opportunity to build a vibrant luxury online business in China.

2. Salvatore Ferragamo

Italian luxury goods retailer, Salvatore Ferragamo has a total of 50 stores in 32 mainland cities in China. In particular, China’s booming luxury market has been a key driver to its sales growth, and the company has plans to open seven to nine stores in China’s lower-tier cities, in the next three to five years. Further, as part of this expansion plans, Ferragamo has recently launched its two stores, in Kunming and in Guiyang. It was only in 1994, when Ferragamo entered China with its first store, and now the country has the potential to become its number one market.

3. Louis Vuitton

Louis Vuitton, the first luxury brand that entered China has a massive stake in the country, considering it will become the world’s biggest market for luxury goods. Since, LV opened its first store in 1982, the brand has grown steadily and now has 36 stores across the country, and it is also rumored that in the coming year, LV will open its world’s biggest store in China. Chinese consumers have recently witnessed the Louis Vuitton Voyages Exhibit at the National Museum of China, marking the 20th anniversary of the French fashion marque in China.

4. Hermés

French luxury fashion brand Hermes has recently opened two watch boutiques in Wenzhou, China, and will offer its exclusive timepieces including Cape Cod, H-our, and Arceau collections. The opening of boutique in Wenzhou city is Hermes’ first move to expand its retail market outside China’s high-profile cities like Shanghai, Beijing, and Guangzhou. Further, Hermes also opened boutiques for its brand Shang Xia, as part of their bold strategy that also highlights China’s growing importance to luxury goods companies. Now, every now and then Hermes releases its new collection for the Chinese market.

5. Burberry

Burberry currently operates in 30 cities in Mainland, and has 50 franchise stores, which the company bought in a deal worth of $111 million. The brand, seeking to tap growth potential in China has shored up its business in the country, taking full ownership of distribution channels there and setting the stage for the brand’s big China strategy. Last, year, Burberry opened its flagship store in China, boasting in store iPads, virtual touch-screens and more.

6. Fendi

Fendi, one of the largest Italian born fashion brands that is owned by Louis Vuitton Moet Hennesy, has been active in China for close to two decades. The brand has been forging ahead in the country, and is known as the first brand to hold a fashion show on the Great Wall of China, which strongly resonates today as a symbol of China’s arrival on the global fashion scene. Till last year, Fendi has a network of close to 20 stores across China, which are becoming bigger and bigger to accommodate the full products line, including the furs, fragrances, eyewear, timepieces, and writing instruments.

7. D&G

Italian fashion brand Dolce & Gabbana has plans to open 15 new stores across China in the coming years, as its effort to boost the business in the fastest growing luxury market. D & G currently operates 26 flagship stores in the country, including in Hong Kong, and also has plans to introduce high-end cosmetics line in partnership with Procter & Gamble Co., a consumer goods giant. Last year, D & G even made its website online in China, catering to strong online market.

For more detailed insights into Chinese consumers ever-increasing love for luxury, we have earlier told you about the Chinese billionaires growing appetite for private jets and yachts.

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