I should be used to it by now, but I am always amazed at the conspicuous display of wealth whenever I travel to Asia. The signs of wealth are everywhere.
I see more people drinking $3 cups of Starbucks coffee in Shanghai than I see in Seattle. I see more ladies clutching expensive Louis Vuitton handbags in Beijing than in Boston. I see more iPods and iPhones in Hong Kong than in Houston. And I see more $200,000 Bentleys on the streets of Wuhan than in Palm Beach, Florida.
The reason is simple: Asians have the money to spend, and they absolutely love western luxury goods. According to Asian consultant Bain & Company, the future for luxury goods retailers in Asia has never been brighter. Bain & Company just updated its outlook for the luxury goods sector, and it's expecting big things this year.
Bain expects sales of luxury goods high-end apparel, accessories, watches, and jewelry to hit $236 billion in 2010, up from $214 billion in 2009.
"After the crisis a new luxury era is emerging," Bain said.
In a separate study, Altagamma, the Italian luxury trade group, said it expects the luxury goods industry's profits to increase by 15% in 2011.
"In 2011 we are going to witness even better growth. Global consumption in 2011 should be significantly close to the record levels of 2007," the group said.
Luxury goods sales in China are expected to increase by 30% to $12.8 billion, while sales in the entire Asia-Pacific region will grow by 22%. Sales in stores directly operated by makers of luxury goods will jump by 20%, and Bain expects as many as 350 new stores to be opened by the end of 2010 in Asia.
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