China's appetite for luxury goods is growing
rapidly.
Call it a reaction to years of austerity, but China is the world's third largest consumer of luxury goods, accounting for 12% of global sales, according to a December 2004 Goldman Sachs report. If this trend continues, China could surpass the U.S. to become, along with Japan, the world's largest purchaser of luxury items by 2015. Chinese yuppies are driving the demand, buying everything from expensive watches to imported cars. And luxury purveyors are responding: Armani plans to open 24 stores in China in 2008.
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The three most popular foreign beauty brands in China are Estée Lauder, Lancôme and Guerlain. More than 50% of affluent Chinese consumers own either a Lancôme or an Estée Lauder product.
On average, affluent Chinese consumers will spend up to $280 on a single skin-care product
Skin care is almost three times as popular in China as makeup. Imported foreign products dominate the high end of the market because beauty products tend to cost less than luxury fashion items, so women are willing to splurge on them. Skin-care sales in different regions of China account for 26% to 35% of total cosmetics sales.
While the Chinese are just getting into the whole luxury thing, Japan is heading the other direction. Japanese consumers' passion for global luxury items is waning.
You can see the doom and gloom video report on The Financial Timeshere.
