China And The Luxury Goods Industry
With strict tax and import duties placing heavy burdens on luxury goods in China it is becoming increasingly difficult for Chinese citizens to afford the items they desire the most. In fact, citizens of certain countries such as Hong Kong and Taiwan are even prohibited by law from purchasing luxury items in China. With large tax obligations placed upon luxury goods in China along with heavy tariffs, VAT and import duty, that can be up to 50% then it isn’t uncommon to hear from Chinese citizens trying to visit Western countries to only shop. If you enjoy shopping and fancy buying things, perhaps a vacation to China is the ideal option for you and your family?
China’s booming economy has opened the country up to consumers from all over the world, allowing for a massive influx of goods market into the country. Whilst this has been good news for China’s growth, it has also meant a sharp increase in the demand for imported goods, especially in the high-end consumer market. Given China’s recent experience in dealing with the current global economic slowdown, it isn’t hard to predict an increase in import tariffs and high-end luxury goods market in coming years.
Luxury goods industry experts forecast that the demand for imported goods will continue to grow as China continues to modernize its economy. China’s brand image has grown considerably over the past decade and consumers in China and throughout Asia are looking for international brands to buy their branded clothing, electronics, accessories and so forth. Luxury brands are particularly popular in China and a trip to any city in China will reveal a number of these brands. As consumers become more discerning, these brands are likely to remain popular through the coming years.
Chinese consumers have been known to travel abroad to spend money on imported goods. These trips are thought to occur when tourists in China want to experience foreign travel and enjoy the benefits of different cultures. One of the benefits of luxury brand names is that they are able to create a specific set of expectations for consumers when they purchase their clothing or other luxury goods. This is because luxury brands are known to provide consumers with the same high quality and unique style that customers would expect to see when shopping in their own country.
This is certainly one of the main reasons as to why Chinese manufacturers of luxury brands continue to succeed. China is emerging as a world leader in terms of economic, technological and cultural development. China’s economy is growing at a steady pace, and its consumers are growing to embrace change. A quick look at the latest surveys on luxury purchases by Chinese people show that consumers have become increasingly price sensitive. They prefer to spend less than the advertised price to acquire products of superior quality.
European retailers who only started dealing with Chinese manufacturers of luxury goods a few years ago could not have imagined how big a market this giant country would open up for them. China’s economy is growing at a rate of about 7% a year, making it one of the fastest growing economies in the world today. It has the potential to expand its market even further, especially with the help of its current Western partner, the European Union. China’s economy is also opening up to the European market through the expanding trade deals that it has signed with European companies.
Luxury brands have seen a huge increase in their profits in China, and this has made Chinese consumers more willing to purchase their products. China and Europe seem to have hit it off like a match made in heaven. Luxury goods companies have already launched their European versions of their products, and more are expected to be launched in the near future.
The fact that China and Europe seem to be a match made in heaven is likely to continue for quite some time. Luxury brands have a wider appeal to the Chinese consumer than they do to other consumers. With a larger market, they can make better profits, and there is a much bigger potential for growth. China and Europe seem to have hit it off like a match made in heaven.