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Fashion & Accessories September 2012

The overall sales value of the luggage and bag market in China was 51.6 Billion RMB, and handbags represent approximately 37.8% of the overall sector.


General market overview

In 2011 the volume of imports of luggage and bags into China was a total of $1.36Billion (8.56 Billion RMB) with an average unit price of $ 88.15. Although this was a 76.53% year-on-year decrease, the actual total value increased by 48.37%, and the average unit price increased by 532.07%. Source: China industry research Co.

According to Coach which had a sales volume of 1.17 Billion RMB and an estimated market share of 6%, the total handbag market size in China in 2011 was worth approximately 19.5 Billion RMB. The overall sales value of the luggage and bag market in China was 51.6 Billion RMB, and therefore handbags represent approximately 37.78% of the overall sector.


Market trends

Globalization is pushing Chinese women and men to become sophisticated buyers sooner than perhaps expected. The trend in luxury in tier 1 cities is moving towards understatement and the days of large logo’s and garish handbags are fading. There is a shift towards genuine quality, hand stitching and the best leathers. This bodes well for classic European brands in China’s luxury handbag market.


Handbags and accessories

Bags and accessories account for 30% of the luxury goods market in China according to a 2011 Bain & Co report. Purchases are made for both personal consumption and as business gifts, and in fact men are the larger consumer group of the two sexes. White- collar woman often choose larger bags that are both practical, modern and stylish for work, but that are just as suitable for taking to a bar or dinner with friends that evening.

In a cash centric society, men’s clutch bags are large to accommodate a large pile of 100 RMB notes essential for the day’s business, to pay for lunches, dinners and KTV in the evening. Men need to show other’s that they are successful and have status, and need a place to store their iPhone(s) and business cards.

The next generations of Chinese luxury consumers are more knowledgeable than their elders, and therefore already know many smaller and less well-known luxury brands, and follow them. They will not necessarily follow the herd and the buying patterns of the past; a challenge that many established bag brands here need to rise to.


Men’s handbags

Handbag manufacturers present in China have been very fortunate to have landed in a country where as many men buy and use handbags as woman. For men, the handbag demonstrates status as well as being practical. Leather goods are also very popular as gifts to be given to business associates, who in the most cases fortunately are other men!

Mao Xun, Director of Trends Health magazine, said that according to their research “about 30% of men regularly buy bags and shoes. As for masculinity, there is different understanding among Chinese men and Western men” Mao Xun continued “bags are well recognized and its easy to tell whether the brand is famous or not” Sampling results of the study in Beijing shows that, compared to the Western tradition of “manly” point of view, the respondents pay more attention to the real benefit and practicality of small handbags.

The global retail Chairman of Coach Victor Luis said that they found the cross-body bag in the Chinese market sells much better than in the United States. Coach also produced a special version of the bag for the Chinese market, and in fact, in Mainland China, half of the handbag and accessory buyers of Coach are male.

Louis Vuitton

At the end of July 2012, there were 41 LV stores in China.
On the evening of July 19, LV held a big autumn/winter show at the old pier in the North Bund in Shanghai. This was its largest press conference held by the brand since arriving in China 20 years ago, and also its biggest overseas conference in its 157-year history.

3 days later, the Louis Vuitton flagship store in Plaza 66 was officially opened having been upgraded to a “Louis Vuitton Maison”. In his speech, the global chairman and chief executive of Louis Vuitton China repeatedly mentioned that “Chinese customers are becoming more and more complex.” He also acknowledged that young customers in China, in particular, have a strong interest in the brand, and they are focusing on the quality, workmanship and the brand history.

In 2013 the brand plans to open a further Maison in Beijing in addition, there will be a further two new stores opened in mainland China that year. It also started to offer custom made leather goods to wealthy consumers including items such as a mahjong box.


Currently there are 19 Prada stores in mainland China, with plans to open a further 12 to 15 over the next 2 years. In its H1 results, China accounted for approximately 25% of its total revenue.

In August its refurbished store in Plaza 66 in Shanghai was re-opened, as was a new flagship store in Taipei covering 750 sqm.


The brand currently has 51 stores in China, opening its newest in Chongqing in June this year. In August it introduced a limited edition range of sports shoes for mainland China to be sold in 11 stores, prices range from 6460 to 8840 RMB per pair.


Hermes currently has 21 stores in 14 cities. The plan for 2012 is to open three new stores and refurbish others. In July, the group announced that the store in Shanghai’s Plaza 66 would be refurbished and re-opened in H2 2012. The gossip amongst Hermes fans in China is a fear that to increase profits, volumes will be increased, which they are against.


Dunhill sales in China account for approximately 40% of the total global sales volume; however, there is a perceived issue for the brand in China that it has lost its personality and development direction recently.


Currently has 35 direct stores, and in July Dior women’s boutique and Dior Homme menswear boutique officially arrived in the Wuhan International Plaza.


The President of Coach announced recently that they are very confident about the Chinese market in 2012 and it will become a key engine of their global growth. The brand plans to gain 10% market share in China’s luxury handbags and accessories market by the end of the 2014 fiscal year.

Currently there are 74 Coach stores in Mainland China, with 23 stores in first-tier cities, and the rest are in the second and third tier cities. The brand has adopted a policy of being the first mover in the sector into many tier two and three cities, such as Yangzhou that opened on June 1st. Their goal is an additional 30 stores per year, which would result in 96 in total by the end of 2012.

The Coach online flagship store opened earlier in Tmall(B2C store on Taobao) flopped initially as no product was sold in the first month. The brand plans to officially launch its own E-commerce site in the next 12 to 18 months.


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