Bulgari taps growing wealth
Italian jewellery and watch company Bulgari Group expects China to become its second-largest market after Japan within the next five years as China's rising middle class obtains the wealth to purchase high-end goods.
Bulgari has opened its first two stores in China, in Beijing and Shanghai, and is examining sites for more stores in other major Chinese cities.
'Our plan is to build a sizable business in this country in a relatively short period of time,' said the company's chief executive, Francesco Trapani, during a visit to Beijing.
Shanghai alone has 800,000 people with annual income exceeding US$75,000 a year, Mr Trapani said.
That group is a prime target for Bulgari's goods.
He said he would consider moving manufacturing of the company's jewellery - but not the watches, which will remain Swiss-made - from Italy to the mainland if the quality standard could be maintained.
However, Bulgari has just entered the Chinese market and is not contemplating a short-term shift in its manufacturing sites.
Bulgari has built itself from a small Italian jewellery company to become a global brand with sales last year of 774 million euros (HK$7.16 billion).
Forty per cent of the company's sales come from the United States and Europe.
In Asia, although the company does not divulge a precise breakdown, Japan is by far the largest market, followed by a group including Hong Kong, South Korea and Singapore, and then Taiwan.
Although the US$60 billion jewellery market has been relatively flat over the past several years, and the US luxury goods business was hard hit by the September 11, terrorist attacks in the US and is just now recovering, Bulgari has experienced some business growth in Asia.
Apart from its jewellery and watch business, Bulgari is building hotels in a joint venture with Marriott International.
The first will open in Milan next year and the second, a resort, is under construction in Bali.
Bulgari has been approached by property and hotel groups to construct a similar, high-end hotel in China.
'We are analysing the projects to see if they fit our requirements,' Mr Trapani said.
