China Has Gradually Become The Most Important Growth Market In The Global Luxury Industry

Luxury manufacturers usually blame the weak growth of their sales on the lack of support from Chinese government officials. However, Hugo Boss executives publicly said that they had ignored a more important factor: the explosive competition in China's luxury market.

Hugo Boss: Competition Changes China's Luxury Market

As China has gradually become the most important growth market in the global luxury industry, high-end retailers, including LV and Michael Kor, have begun to expand rapidly in the country. According to the forecast data provided by brokerage firm CLSA Asia Pacific Market, there are about 1000 luxury retail stores in China today, double the number five years ago.

In an interview, Klaus Dietrich Lars, CEO of Hugo Boss, pointed out that "obviously, China is more competitive than any other market." According to statistics, the German high-end brand has 105 stores in mainland China. In 2011, the brand announced that it would add 60 stores in China by 2015.

Russ claimed that the slowdown in the growth of the luxury industry has not changed Hugo Boss's plan. What has changed is that it needs to be smarter than its competitors.

It is reported that Hugo Boss has added new injection in its Chinese stores shoes Products such as accessories and accessories have also been added, which are specifically targeted at female customers, Internet sales, and the creation of theme sales publications, such as those dedicated to golf and other sports enthusiasts, to provide consumers with more targeted products.

Another strategy implemented by Hugo Boss is to make it easier for consumers to buy newly released products. At the Shanghai Fashion Conference held recently, some products of Hugo Boss can be purchased immediately without having to go to the exclusive store to order, saving customers' waiting time.

Russ claimed that since the Chinese government banned civil servants from using government funds to buy luxury goods in 2012, Hugo Boss's sales have weakened. He believes that "growth will continue, but whether the growth rate is more or less is still unknown."

It is reported that in September 2012, Burberry warned that in the first quarter, the growth of the brand's Asia Pacific sales slowed significantly to 18%, only half of the same period in 2011.

In addition, some luxury companies, including Gucci, have announced that they will not expand their business in China. It is reported that earlier this year, Gucci publicly said that it was slowing down the pace of opening stores in China. At present, the brand has 75 stores in China.