Luxury goods market dented by govt policies

By He Wei and Yu Ran in Shanghai (China Daily) Updated: 2012-12-13 09:44

The luxury market outlook for 2013 is expected to pick up moderately from the 2012 level, the report said, despite some challenges and uncertainties in the economic environment.

That echoed a study by McKinsey & Co that suggested China may claim one third of luxury spending worldwide with a projected $27 billion by 2015.

However, the annual increase rate of consumption in the domestic market will subside from about 18 percent for the past four years to an annual rate of between 12 and 16 percent for the next three years, according to McKinsey.

The survey also showed that Chinese consumers' tastes in luxury products are maturing with surprising speed.

"Shoppers with just a few years' experience increasingly prefer low-key and understated goods more than the ones that are emblazoned with popular logos," said Yuval Atsmon, a consultant at McKinsey and co-author of the report.

Lannes agreed. He said Chinese buyers in first-tier cities are shifting away from the typical emerging market preference for logos and turning to unique, high-quality and understated luxury items.

But both believe that the market is still fragmented, as the fast-growing numbers of new entrants still favor widely recognizable brands that show off their status.

Contact the writers at hewei@chinadaily.com.cn and yuran@chinadaily.com.cn