China has become the number one market for LVMH's Hennessy cognac and the world's second largest for its fashion and leather goods maker Louis Vuitton.In some years,China may become the world's largest luxury market.But now,there are many cultural challenges to win customers' hearts for certain types of porducts.
The first challenge in China is finding a Chinese comany you can trust and who understands the luxury business.
The second challenge is counterfeits.Many company suffered from counterfeits.Counterfeits cost luxury groups hundreds of millions of euros in lost sales every year and imitations are becoming increasingly refined and sophisticated.
The third challenge is that most Chinese population cannot afford upmarket Western brands.The challenge is how to explain to 1.3 billion pepople what your brand is about.
But luxury groups agreed that China will soon be the No 1 market and this year will be one of the few emerging markets to enjoy growth.Earlier this month,a survey of Chinese luxury retailers showed that demand resilience through the first and second quater of 2009,most notably for mega-brands with high brand recognition.
Scilla Huang Sun, who runs a $30-million luxury fund for Julius Baer, said. "Chinese will not buy the very high end, like the Russians, but there are so many Chinese ... (They) save a lot and it's a huge country."
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written by Louis Vuitton bags, January 03, 2010
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