Retailers in the US and Europe may be lamenting the disappointing earnings this summer, but on home turf the luxury market continues to boom thanks to the mainland's love for all things labelled and expensive.
Although Giorgio Armani's total earnings were down overall in the last financial year, the brand reported a 32 per cent revenue growth on the mainland. Meanwhile, Burberry recently spent GBP70 million (HK$842 million) to buy back its 50 franchises on the mainland in an effort to bring all its stores under a single umbrella (and no doubt reap more profits).
To further reinforce the mainland's Midas touch, Ruder Finn Asia also announced the results of its China Luxury Forecast for 2010 last week. The firm interviewed 1,100 luxury consumers in greater China (including Hong Kong, Taiwan and the mainland) and found that - surprise, surprise - the mainland's purchasing power and demand for luxury will only continue to grow over the next 10 years.
Of the top 20 brands consumers intended to buy this year, Louis Vuitton, Chanel and Gucci held top honours. Interestingly, mainlanders are not as enamoured with Japanese brands as Taiwanese and Hongkongers are, and instead are opting to buy brands out of France and Italy.
Perhaps the biggest revelation was that 68 per cent of consumers surveyed said a luxury brand's social responsibility would affect their decision to buy its products (numbers for Hong Kong were lower, at less than 50 per cent).
Ruder Finn chairman Jean-Michel Dumont attributes this to the Sichuan earthquake and its aftermath. Since then, consumers - especially those on the mainland - have expected brands to give back to the community, which is why labels such as Versace, Hermes and Cartier have launched charity initiatives on the mainland over the past year.