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Celine Sun

Louis Vuitton and Gucci may be losing their allure with the mainland's well-heeled shoppers who want something even more exclusive and chic now the less wealthy have discovered luxury brands, according to the World Luxury Association.
'No matter how much you love your Louis Vuitton bag, you'll dump it when you find people from a lower social status than you are using it as well,' said Ouyang Kun, chief executive of the association's China office.
He said Louis Vuitton and Gucci now needed to retain the loyalty of the mainland's biggest spenders and protect their market share.
In contrast, French brands like Hermes and Chanel that are more expensive yet less well known among the Chinese have more loyal customers in cities like Beijing, Shanghai and Guangzhou.
'For those top level customers, luxury goods are part of their social image. So the higher the prices, the more sought-after they will be among this group,' said Ouyang. 
In addition, Chinese consumers in big cities have become increasingly mature and knowledgeable. They prefer to buy what they perceive as an exclusive handbag or pair of shoes, rather than something produced for the mass market.
In a report, the association said Louis Vuitton and Gucci are the most popular luxury fashion brands on the mainland. In a survey of more than 50,000 Chinese consumers, 78 per cent said they made regular purchases at Louis Vuitton shops and 63 per cent said they had bought Gucci goods more than once. 
'But over the next one to three years, the market will experience a reshuffle. The two brands may need to switch their focus to tier two and three cities in China as their sales in tier one cities fall,' Ouyang said. 
According to the association, luxury sales on the mainland, excluding private jets, boats and cars, reached US$10.7 billion in the year to March. Luxury spending in Europe by Chinese consumers surged over the same period to US$50 billion. 
The report estimates that luxury sales in China will reach US$14.6 billion next year, making it the world's top market for such products. 
Japan is currently the biggest luxury market, but its appetite has fallen sharply in the wake of the catastrophic March 11 earthquake and tsunami. The association said international luxury companies including LVMH, PPR, Hermes and Richemont Group are considering scaling down their investment in Japan, and increasing their focus on China. 
Separately, the association also announced it was setting up a joint commission with the China Council for the Promotion of International Trade to publicise the luxury industry and help introduce Chinese luxury brands to the global market, starting with Chinese tea, liquor, furniture and jade jewellery and ornaments. 
The association describes itself as a non-profit US-based organisation with offices in more than 10 countries, including the United States, France, Italy and Spain, that aims to improve luxury brand management.



Shoppers demand exclusive luxury