Reading through my fellow classmate Ying Jiang’s blog: To unscramble Chinese mentality of purchasing luxuries. I came up with a new question. Recent data strongly suggests that China’s luxury market is still in slowdown mode, but while some companies are seeing a strong slump, a clear set of winners is making it through 2013 with solid sales The first blows came last year, with an economic slowdown and jitters about the political transition. Now, a crackdown on corrupt gift-giving and a populist backlash against ostentation have added to the woes.
The outlook for luxury-goods firms appears to have dimmed. Internet users have posted incriminating pictures, for example of poorly paid bureaucrats wearing suspiciously pricey watches, which have caused heads to roll. Mobs have also disrupted banquets deemed to be too lavish, on occasions forcing officials to their knees to beg for forgiveness.
The bottom line for the luxury sector is that the numbers show that even if China’s slowdown is long-term, brands with the right marketing strategies and an understanding of Chinese luxury consumers can still experience solid growth. According to the recent survey, the Chinese growth rate was the third-highest factor in cause for optimism about the global luxury market.
In addition, companies worried about China growth should take a look at the global picture: Chinese customers may not be buying as much luxury at home, but they’re certainly spending it abroad as the world’s largest-spending bloc of tourists. As a result, brands must focus on the Chinese consumer on an international level in order to truly cash in on the market’s high long-term growth potential.