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Jan
2013

The 2013 Brand Reach Review part 1

2012 saw the luxury sector in China slow dramatically for many of the most visible brands operating here. The double-digit growth figures dropped to single digit, and the generally weak global performances were blamed on Asia, and in particular China. This blame, in our opinion was very misguided, a matter we reported on many times towards the end of the year. Simply put, more Chinese money was being spent on luxury products and services than previously, but not with many of the brands that had benefited for the previous few years. In fact, thanks to the travelling Chinese, much of it contributed to the performance of luxury brands in elsewhere in the world.

The year of the dragon, was in our opinion a watershed for the Chinese luxury market; a time when consumers in tier one and top tier two cities became more selective, more knowledgeable and voted with their wallets. Some brands predicted the change early enough, whilst others found it necessary to wait for poor results before reacting. These consumers also went overseas to buy, and to seek new and more interesting rewards and gifts. Of course the less savvy consumers in tier two and three cities still required badges of status, but waiting for the new party leadership made them a little more cautious.

2013 will be different, both because this is China and nothing stands still for long, and because the changing consumer dynamic will mean that brands must become more engaging across a growing and less homogeneous market. Assuming that double-digit growth here in China was a constant to observers and commentators like us, was always improbable. The cusp that we are at is a time to evaluate where the market is now, and to consider where it will move to, which is the basis of the Luxury Insights China 2013 Brand Reach Review.

In this multi-series report, we take a look at where luxury brands are in terms of their geographical spread across the country, the depth they have established in cities and regions, and link this to the wealth demographics of the luxury consumer. In the first of the series, we take an aerial view across the four most active luxury sectors, using 152 brands currently with 3,222 operating stores or dealerships in Mainland China as our benchmark in order to give perspective to what will soon be the world’s largest luxury market, and already accounting for the world’s largest single luxury consumer group……[Click to free download the full report]

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