The luxury retail adjustments in China have begun

For the past few weeks, a team of our researchers have been gathering data for the 2013 H1 Brand Reach Review for China’s luxury brands. We monitor 152 luxury brands across the automotive, watch, jewellery and fashion sectors, and have done so for the past 12 months. The tipping point the market in China hit towards the end of 2012 caused a visible tremor to run through the sector, particularly elsewhere in the world where real understanding of Chinese culture and the market are quite superficial. الرهان الرياضي

In January this year we issued the first ever Brand Reach Review as a benchmarking assessment of where all these brands were at that time in terms of physical presence in cities across the country. Our goal is to independently track the movement of individual brands in China, as the market readjusts in 2013 and beyond, and to identify trends and review differing strategies that are being adopted as spending becomes more selective.

Reviewing the data has thrown up some very interesting facts that demonstrate a shifting approach to China by luxury brands across all sectors, cities that are currently the focus of expansion, and those whose attraction is clearly diminishing. موقع وليام هيل للمراهنات The watch sector is clearly cutting costs, and closing less profitable stores, yet there is a city in which watch retail has increased 33% in the past six months, is this a result of plans that can not be changed, or do the local watch consumers have a different set of rules and attituides to others in China?

Luxury cars have always performed well, yet recently we have heard stores of slowing sales from those in the sector. Interestingly one particular city had a 300% increase in new luxury car dealerships opening this year. bet365.com Many other cities have also seen significant increases, but not close to this level. High jewellery is steadily expanding with some tie three cities increasing retail density quite significantly.

Luxury fashion is a mixed bag with some of the top names pushing ahead with relatively aggressive store openings, yet there are also some well known losers over the last six months; brands very familiar in the west whose store numbers are now lower than six months ago. Some actually belong to the big groups, a handful being privately owned. Having parents with deep pockets does not appear to help those that have failed to establish their value over the previous few years to the Chinese consumer.

The 2013 H1 Brand Reach Review will be completed and issued next week, and will identify where new hot spots of luxury are forming and which locations are cooling off. Adjustment of retail distribution amongst all the brands monitored will start to become obvious, although I think we will have to wait until next January for the 2013 H2 review in order to see the real affects of the changes China’s luxury sector has been going through. How they affect the fortunes of the brands operating here and the changes in consumer attitudes to individual brands across all four sectors will begin to become visible.