While all eyes have been on Japan’s economic outlook for years, it’s time to turn that perspective towards China. As many investors such as ARC Investment Partners understand, China is actually expected to surpass Japan as the world’s top consumer of luxury goods by 2012, and this is just one example of their economic momentum. According to the World Luxury Association, there is growing demand in China for such goods, and a decreased consumption in Japan.
In a survey they released in Beijing, the WLA predicted that luxury goods in the Chinese market (not including private jets, yachts, and luxury cars) will get to $14.6 billion in 2012. In the 13 month period from February 2010 to March of 2011, it was $10.7 billion.
As Michael Ouyang, the Chief of World Luxury Association China office said, “China has been rising with the fastest annual growth.”
In important news for investment groups like ARC Investment Partners with Adam Roseman, Mr. Ouyang also said that companies that have opened stores in China’s first-tier cities will have even more opportunities in the second and third-tier cities.
Certainly, the economic problems in Japan with luxury sale items can be partly explained by the devastating earthquake in March. 49% of brand stores had to stop business for one month following the earthquake, as the survey pointed out. Not only does the World Luxury Association expect this slump in the Japan market to continue for a year, but it predicts that 70% of brands will move their commercial plans to China as a result.