Five years ago, there were about 20 to 30 luxury shops here. Today everyone is here and their networks in continental China are becoming more and more significant," McKinsey management consultant Jacques Penhirin (partner of the McKinsey management consulting firm) told AFP. This is a popular quote by Jacques Penhirin, partner of the McKinsey management consulting firm. He mentioned this after the recent explosion of luxury industry in China. Indeed, although concentrated in some neighborhoods of large cities like Beijing or Shanghai, the presence of all major global brands is essential today in mainland China. In Hong Kong, these brands have been present for a long time.
[...] Among the countries undergoing economic and social development, China now appears as a paradise for international luxury brands, which, by capturing a small fraction of China's population, is able to buy such products, and are experiencing explosive growth in this countries. It should nevertheless be asked now whether such a model of development can enroll in a more long term approach by questioning the limits of the Eldorado Chinese. II. Limitations of the "Chinese miracle" The weaknesses of the "dragon" Indeed, it is impossible to mention the Chinese economic miracle without analyzing the weaknesses of China, which in the long run, may prove to be as much a threat to development in the luxury sector. [...]
[...] These constitute more than 200 million people and many are potential consumers of luxury goods: The very rich, between five and ten million people. These are the heads of large companies, expatriates, professionals, executives of the highest paid of joint ventures and top officials of the State. These consumers often have a strong appetite for high-end products and luxury from abroad than they consume in large numbers. The middle aged class of 25/35 years represents another group of about 30 million people akin to Western executives. [...]
[...] The evidence of Chinese luxury and affluence is seen from the frenzy of rampant consumption of luxury goods. For the latter, the price is not a criterion for determining choice. The Chinese seem to appreciate the beauty of the object and emphasize more importance to quality. Hence they are often subject to impulsive purchases. They are more influenced by the fashion, trends and technological innovation, and often opt for items that display class and luxury. Even if the challenge for brands is to penetrate the huge market of mainland China, it is necessary to pause a moment on the situation of Hong Kong. [...]
[...] According to Bernard Arnault, CEO of Louis Vuitton, "China is the fourth largest customer base for Vuitton in the world. This market is growing quickly, which is still minor for turnover of the group but the results are there from the year of opening a store. " The example of Louis Vuitton is not an isolated case: all the major luxury brands such as Dior, Prada, Chanel, L'Oreal, Armani, Gucci and Burberry are witnessing a major growth pattern in China. [...]
[...] Brazil, including the region of São Paulo, is also regarded as a growing market for luxury goods sector. It has grown on an average of 35% over the last five years. There are about 500,000 consumers of luxury goods, representing only 0.2 to of the population. Additionally, there are about 20,000 millionaires who go into the accounts of major brands represented in Brazil such as Armani, Versace, Tiffany, Mont Blanc, Dolce & Gabbana, Vuitton, Bulgari, Dior, Cartier and comer, Burberry etc. [...]
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