Hong Kong’s luxury retailer THE SWANK — which is owned by ENM Group and operates multiple fashion brands in Hong Kong and Beijing, including Brioni, Sonia Rykiel, and Roberto Cavalli – is planning expansion to second- and third-tier cities.
“In 2012, THE SWANK will open its first stores in Xi’an and Hangzhou,” said Tony Lam, the retailer’s general manager, “And in the next five years, we will open at least five stores in the mainland.” The motivation for such bold plans? Sales at the company’s Beijing store have grown by 25 percent annually since it opened in 2009.
Frost & Sullivan Inc, a US market consultancy, reports that China’s luxury consumption in 2010 reached nearly $35 billion and has a compound annual growth of 26 percent.
Frost & Sullivan said that the number of Chinese people willing to spend money on luxury goods will grow over the next five years from 40 million to 160 million, mainly in second- and third-tier cities.
In 2010, 21.7 million Chinese had an annual disposable income of more than 100,000 yuan. By 2015, it is conjectured that 54 million people will. By that time, China is also expected to overtake Japan as the world’s second-largest consumer of luxury goods, and luxury consumption will reach 570 billion yuan.
photo credit: landmark