Essay on Chinese Luxury Market

Essay on Chinese Luxury Market

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In 2005, Ernest & Young published a report on Chinese luxury market stating China has become the world’s third largest consumer of high-end fashions, accessories and other luxury goods and accounts for an estimated 12% of global sales (Young, 2005). Along with other similar reports on the booming growth of the Chinese economy and the luxury market in particular, many of the luxury brands originated from Western countries such as France, Italy and United Kingdom has already tapped into the market, those who haven’t already has plans for it are starting to do so. Although many reports have expressed the importance of the Chinese luxury consumption, large disparities exist; some say China accounts for 12% of global sales, some say 8% (Young, 2005; Movius, 2005). According to Zhu & Wang(2005), although inconsistency in data exist, most reports come to similar conclusion that China is the third largest luxury market and it is expected to grow and become the first in 2015 (Sachs, 2005) with the amount of consumers rising from 175 million to 250 million in 2015 (Young, 2005).

The future of the Chinese luxury market is undoubtedly promising, however it is important to realize that the current market is in fact smaller than imagined and the size still remains limited, with only 3% of the global sales took place domestically in China while more than half of the total sales happened abroad (Movius, 2005). Luxury brands that have placed their focus highly on emerging market due to the continued growth of the luxury industry should be aware of the fact and hence develop responsive marketing strategy instead of transferring the same traditional strategy from the western world (ChinaDaily, 2011). As the market is far from mature (Anestis et ...

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...e hand, this could preserve the brand identity and maintain similar quality of service; however, they have ignored one important need of their customers, which is customization (Okonkwo, 2007).

Although several studies have looked at how cultures affect consumer behaviour in China, none have adequately compared it with other countries Invalid source specified., moreover, most have looked at the issue from the customer’s perspective by analyzing the motivation behind enormous consumption (Wong & Ahuvia, 1998)Invalid source specified. (Gao, Norton, Zhang, & To, 2009). Only few have evaluated established marketing strategies with cultural analysis, those who have done so only focused on segmentation and positioningInvalid source specified.. In this essay, luxury brands’ perspective will be used to analyze how culture influence on existing marketing mix employed.

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