Shanghai Tang

7th International Scientific Conference “Business and Management 2012” May 10-11, 2012, Vilnius, LITHUANIA

ISSN 2029-4441 print / ISSN 2029-929X online ISBN 978-609-457-116-9 CD doi:10.3846/bm.2012.037 http://www.bm.vgtu.lt
© Vilnius Gediminas Technical University, 2012

CAN CHINA DEVELOP ITS OWN LUXURY BRANDS? A CASE STUDY OF CLOTHING BRANDS Changting Zhou1, Xiaosong Zheng2
Sydney Institute of Language and Commerce, Shanghai University, 201800 Shanghai, China Email: [e-mail]; [e-mail] Abstract. Based on the prediction of Altagamma Worldwide Marker Monitor, Chinese luxury consumption will reach EUR18.5 billion in 2015, representing 20% of the global market and becoming the largest luxury market in the world. Since 2006, consumption of luxury goods, which is EUR9.2 billion in 2010, has been growing at a CAGR of 27%. The opportunity for investment attracts all the luxury giants tapping into Chinese luxury markets, causing a fierce competition in Chinese luxury industry. This article aims to explain the underlying reasons for Chinese luxury boom in the aspects of economy, society and psychology. By studying the case study of traditional cheongsam company Shanghai Tang, the bright future of domestic luxury brands can be seen. Through SWOT analysis of local apparel companies, accessible advice to build Chinese luxury brands is provided, especially in the apparel industry. Keywords: luxury brands, clothing, apparel industry, SWOT, China. Jel classification: M39

1. Introduction In December 2011, the world’s leading strategy consulting firm Bain & Company released a report concerning Chinese luxury market. As the report noted, the growth of Chinese mainland luxury market remained strong in 2010. The total consumption of luxury goods in China has reached nearly 212 billion Yuan, of which only 27% was spent in the mainland China and the remaining was spent in Hong Kong, Macau, and overseas. Moreover, about 60% of the growth came from new

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