Update: Luxury in China is increasing rapidly and with some 600-800 million potential future luxury good spenders in China, there is much room for growth for the elite fashion industry.
As the number of rich Chinese people is rising, their new motto seems to be: If you’ve got it, flaunt it. Retail sales figures are up by more than 18% this year from last year, and it seems that the economy is getting to be more consumer driven than ever before.
The fashion industry has much room to grow under these conditions. In an interview with Forbes magazine, Jeacy Yan, a partner at investment company IDG in Beijing and a member of 2011 Forbes China Fashion 25 List, talked about the growth potential of the fashion industry, especially in the high-end casual wear, fast-fashion brands and Luxury China brands.
Watch: Luxury in China is becoming increasingly popular
One of the main reasons that allow such Luxury China growth is the number of people who can now afford to be “hip” and to buy brand names. In recent years, all luxury brand names not only have reported on increased sales in China but also on increased sales in Europe and in Hong Kong. Many Chinese people choose to go to Europe or Hong Kong to buy specific luxury brands that are either not available in mainland China or that are unique – and they are spending top RMB to do so.
Despite such trends, China is still far away from being labeled as a consumer nation, and the government still has a long way to go if it wishes to turn China from a nation of savers to a nation of spenders. Consumption still only contributes 1/3 of the GDP, and the goal is to get that number up to 50%. It seems that China is definitely headed that way, and so the growth potential for Luxury China remains very much viable.