January 21, 2011

2011 Trend Watch: Luxury Brands Targeting Chongqing

Louis Vuitton, Gucci, Prada, Tod’s Among Brands Planning To Enter Chongqing In 2011

Maison Mode Times (美美时代百货) in Chongqing

Maison Mode Times (美美时代百货) in Chongqing

Considering it’s larger than Taiwan and nearly as populous as Canada, it is somewhat surprising that many of the world’s top luxury brands have yet to enter Chongqing, one of China’s four direct-controlled municipalities. But this year, Chongqing will get a long overdue shot in the arm, as Louis Vuitton, Gucci, Prada and several other brands are set to make their debut. According to the Chinese news portal Xinmin (新民), rising incomes and an increasingly saturated market in second-tier cities like Chengdu are enticing an “unprecedented” number of luxury brands to make their way to Chongqing. However, as we’ve seen in emerging cities like Wuhan, Hangzhou and Tianjin, comparatively low brand awareness and loyalty could turn these brands’ Chongqing dreams into more of an uphill battle for the next few years.

From Xinmin (translation by Jing Daily team):

As the only municipality in western China, Chongqing’s GDP is among the highest in the country. In terms of luxury consumption, Chongqing’s famous beauties are driving sales: revenue at Chongqing’s Armani boutique are the highest in the country; Burberry sales have surpassed Shanghai and Beijing; in addition, every year many Chongqingese fly to Europe or Hong Kong for shopping sprees.

According to recent rankings on retail investment attractiveness in Asia, Chongqing came out sixth. “As southwest China’s main city, Chongqing’s consumer behavior and purchasing power are very strong. Luxury goods are sure to see a breakthrough there,” said a representative from the Chongqing Economic Commission. Recently, the Asia-Pacific president of LVMH, the world’s largest luxury goods group, traveled to Chongqing to discuss a timeline for entering the market.

Chongqing residents spend thousands on limited-edition Tourbillon watches, they’re familiar with top brands, and they understand the meaning of “haute couture” and “made by hand.” What’s more, rapid economic development has given Chongqing a great amount of potential as a city of consumers. But Chongqing has unique characteristics: it’s trendy, but not trendsetting; occasionally provocative, but not extravagant; Chongqing residents go against the common wisdom of economists, remaining indifferent to conspicuous consumption. In Chongqing, the elegant and the vulgar coexist.

In terms of luxury consumption, the Chongqingese have always shown themselves to be generous. A manager at Armani told reporters that average monthly sales at the Chongqing boutique are in excess of 3 million yuan (US$456,000), which surpasses even Macau and Hong Kong. Chongqing is the third largest market in China for MaxMara. Cartier Asia-Pacific president Jane Yavin recently said that Cartier will enter Maison Mode Times luxury mall in Chongqing in 2011, and that she believes consumers will respond positively, allowing her to sleep soundly at night.

This year, dozens of global brands, from LV to Gucci to Prada, will finally make their debuts at Chongqing’s “three pillars” — Maison Mode Times, Star 68 and Metro Square.

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Tag: armani, chengdu, chongqing, flagship... , More
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