China is now a major outlet market for high-end Western products, from German cars to French perfumes and Italian fashion. It almost seems as though the producers of the planet have divided up their responsibilities: in China, the 'factory of the world' deals with medium and low-end products, while sophisticated western producers monopolize the high range.
Naturally, the margins are higher in the high range. So the Chinese, who are not stupid, wondered whether it would be better to carve out a presence in that segment as well. According to Price & Waterhouse, the luxury market in China is worth about 15 billion dollars, and has grown by 25% in the last year. There is enough for Zhou Ting, director of the research center for luxury goods and services at the University of International Business and Economics, to say that it is time for Chinese companies to create high-end brands. The problem is that 'luxury' is not a nice word in China: Chinese culture celebrates frugality. And Zhou Ting's report gives an example: Moutai liqueur is among the 10 domestic brands of luxury products: a bottle was recently awarded at an auction for 60.000 dollars. But the manufacturer does not want to label it as a luxury product.
Also read the China Daily
