《luxury market in a post-land rush era》.pdf

China’s Luxury Market in a Post-Land-Rush Era Matt Anestis, Jean-Marc Bellaiche, Hubert Hsu, Michelle Eirinberg Kluz, Yan Lou, and Vincent Lui September 2009 China’s Luxury Market in a Post-Land-Rush Era hina continues to be an important market for global luxury-goods companies. Although not immune to the global economic crisis, the country has suff ered far less than others, and econo- Cmists are even revising upward their GDP growth estimates for the country to the high single digits for 2009. The continued health of China’s luxury market makes it an oasis of hope and possibility in a recession-battered world. China is expected to become the world’s largest luxury market in the next fi ve to seven years. Already, as wealth has spread from the nation’s large coastal cities to smaller cities in the north and west, luxury stores have begun to follow. In fact, the past few years could be characterized as a “land rush,” in which competing luxury brands have tried to establish themselves by capturing territory as fast as possible. Although China’s luxury market will continue to grow, brands that have expanded rapidly will now need to think less about extending their footprint and more about improving store efficiency and optimizing their current network. This shiin focus will require a keener understanding of consumers’ attitudes about luxury goods in order to strengthen affiliation with the brand—both within China and in the countries where Chinese consumers travel. For brands with smaller footprints, continuing to grow might be important, but doing so wisely will be critical. Ultimately, all luxury companies will need to improve coordination between global and local offices, carefully assess the need for a physical presence in each of the cities in this market, determine how they might build a brand in cities where they lack a retail pres- ence, and develop the tools necessary to win new customers at the point of sal