China’s total consumption of luxury apparel is expected to reach about 89.04 billion yuan ($14.5 billion) in 2017.
During 2004-2011, China’s total consumption of luxury goods showed a compound annual growth rate of 20.9 per cent. However, since 2012, influenced by the policies of anti-corruption, suppression of gifting and consumption with public funds, the growth rate of luxury consumption in China has been slowing down rapidly.
In 2013, total luxury consumption in China was 116 billion yuan, up by only 2.1 per cent year on year, falling 5.1 points compared to the growth rate in 2012. In that year, total consumption of luxury apparel was 76.13 billion yuan, accounting for 65.6 per cent of the total consumption of luxury goods.
However, China Market Research Reports says that the luxury apparel market in the world’s second largest economy is on track to recover with the improvement of people’s income as well as the prosperity of agent purchasing and gifting.
Optimistic about the prospects of China’s luxury market, the world’s major apparel brands such as Louis Vuitton, Hermes, Burberry, Gucci, Prada, Fendi and Thomas Pink all have begun increasing their networks in China in recent years.
As of the end of June, 2014, Louis Vuitton had 50 specialty stores in 33 cities in mainland China.
Hermes China strategy is to build affinity with Chinese consumers through its “Shang Xia” brand and through building Chinese-style luxury.
In recent years, while actively strengthening partnerships with Baidu, Youku and Alibaba, Burberry also opened a new online private customisation service. In April 2014, Burberry joined Tmall.com and became the first top luxury shop to open in China’s B2C online stores.