Billionaire Brothers Looking To Move Up - Forbes.com:
"The Fungs' interest in high-end fashion makes sense. According to a World Luxury Association Report, by the end of 2009 luxury product sales in mainland China accounted for about 25% of the global total, replacing the U.S. as No. 2 in the world. China's luxury fashion market grew at an estimated 12.1% in 2009 and is expected to become the world's largest by 2015, Trinity says."
This is a great article,
it highlights key trends which came out time & again, during my discussions with key CXOs in group and individually from MNCs and Entrepreneurs (chatham house rules but I met top guys CEO, COO, head of Business unit (most profitable) of luxury brand, government advisors/lobbists, Government e.g. Citi group, Remy Cointreux, Dior, Capital Today, APCO worldwide, CBBCs etc. )
Where key trends I have observed are:
1.) 2nd and 3rd tier cities have populations in times more than major european developed countries, competitions are much less however, so get there first & maybe even be the 'first' category/high end/premium brand amongst the local population (despite they might not even have considered buying such products), make sense. (of course, product/service might need to be adapted to local tastes/expectation/requirements)
2.) basis of competition might have shifted due to local culture/market structure, as I have previously tweeted briefly on @GarethWong, reason for the earlier profitability and scalable & sustainable growth (& profit) of KFC vs. MacDonald was due to KFC created their own "efficient" and profitable fulfilment arm that meet their own requirements, able to deliver AND keeping cost down. Li & Fung as mentioned in the articled did something similar!?
3.) Wealthy population as viable domestic market for not only foreign brands but also local developed brands. As China will have the most number of millionaires worldwide, it stands to reason that one can 'create' and 'adapt' for this population. However, their taste is being developed as we speak, it is mostly western worshiping so far, but that might most likely be due to lack of choice also.
there are many more but sadly I have only got time for the above three today (well on & off line to prepare for it), I just don't understand how other bloggers can write great and long articles..
back to meeting people in person which I prefer above all else (the pleasant ones anyway!).
@GarethWong
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