That China is headed towards world supremacy is no secret. They are already the world’s biggest gold market and second largest luxury goods buyers market. And now an industry report claims that China will also be the world’s second biggest market for luxury goods after the United States in the next five years, overtaking France, Britain, Italy and Japan. As economic woes in developed nations (including the current second largest market, Japan) lead to a slack in demand, a fast-growing middle class and a fast-developing luxury distribution network in China is making it a very prominent player in the market.
The BRIC nations-Brazil, Russia, India and China are make a majority of the demand for luxury goods and will account for 11 percent of total luxury sales with a combined retail value of over $33 billion this year, up from only 4.0 percent in 2007.
Designer clothing is predicted to be a favorite, accounting for 42 percent of total luxury goods revenue by 2017, though jewelry and watches are fast gaining popularity as well. Last month, Burberry’s shares tumbled as they issued a surprise profit warning and analysts blamed the same on China’s economic slowdown.