Gucci handbags still No 1 choice among affluent Chinese women, says survey
Gucci maintained its slight edge over Prada and Louis Vuitton as the handbag of choice for affluent Chinese womenas the Italian brand continues to roll out “iconic and exclusive” products, a recent survey showed.
About 50 per cent of female Chinese luxury product consumers with an annual income above 450,000 yuan aspired to purchase a Gucci handbag, followed by 49 per cent for Chanel and 46 per cent for Prada, according to a report released this week by RBC Capital Markets.
The news that Gucci is still the “darling” of the world’s largest group of luxury goods buyers bolstered prospects for its parent Kering which has seen a remarkable turnaround this year, with double-digit comparable revenue growth across all regions except Japan for the third quarter.
“Gucci was the hottest brand in the sector in 2016,” said RBC analysts led by Rogerio Fujimori, who raised its price target for Kering to €205 from €200 based on the findings.
The Toronto-based investment bank last month polled 411 affluent female Chinese who said they were interested in buying a luxury handbag costing over 5,000 yuan in the next 12 months.
Handbags are the most important sales segment for LV, Gucci, Hermes and Prada, and a key revenue driver for the likes of Burberry and Ferragamo. Chinese consumers account for about 30 per cent of the global luxury consumer goods market.
But a Chinese economic slowdown and President Xi Jinping’s longstanding crackdown on corruption that curbed ostentatious displays of wealth have significantly bitten into handbag sales of global luxury fashion houses, with many of them still struggling to recover from multi-year revenue declines.
The survey respondents who preferred a Gucci handbag perceived the Florence, Italy-based brand as “exclusive and iconic”, while half of them also believed its designs suited their tastes.
Chanel and Prada retained the second and third spot, while LV and Hermes were the number four and five popular brands respectively.
Gucci also snatched the crown as the most sought-after luxury footwear label with 70 per cent of the Chinese women surveyed intending to make a purchase of the brand in that category, with Prada and LV taking second and third place.
“Chinese female luxury consumers still prefer highly recognisable designs to understated and discrete designs but the gap has materially narrowed,” the RBC report said.
Amid a luxury downturn made worse by terrorist attacks and currency fluctuations, Kering reported a 10 per cent revenue rise for the third quarter to €3.2 billion, boosted by an 18 per cent jump in Gucci sales. Its Paris-traded shares reached a 15 year high on October 26 on the faster than expected revival of Gucci.
To combat niche and exclusive labels, luxury behemoths are stepping up their efforts to woo customers with audacious designs.
Gucci reshaped its boutiques with baroque-style decorations and rolled out a range of leather bags with painted insects and animals mixed with their signature patterns.