Saturday, August 19, 2017

The future of luxury product suppliers is dependent on Chinese consumers

My good friend Kim Walker is the person who normally writes about what is happening in China.

The reason I am saying something about the country is as much for my benefit as yours.

I need to regularly be reminded of the vast size and importance of the country. It is so easy to get obsessed with local US and European issues to overlook this huge economic entity and its importance to world trade.

McKinsey published a report about the luxury market that contains a few facts that remind us why the country is so important.

The number of Chinese millionaires is expected to surpass that of any other nation by 2018, and by 2021 China is expected to have the most affluent households in the world.

In 2016, we estimate that 7.6 million Chinese households purchased luxury goods—a number larger than the total number of households in Malaysia or in the Netherlands.

Each of these 7.6 million households spends on average twice what French or Italian households are spending.

Chinese luxury consumers account for over $7.4 billion in annual spending, representing almost a third of the global luxury market.

To this list of facts remember that China is one of the world's fast ageing countries. There is a lot of coverage about the tech innovations targeted at old people, especially those in the US. I hope they are keeping a close eye on what is happening in China. Dick Stroud

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