- Title: CHINA: Luxury goods vendors eye China market, despite global economic slump
- Date: 23rd November 2008
- Summary: (SOUNDBITE) (Mandarin) LI PENGCHUAN, VISITOR TO SHOW, SAYING: "There is certainly a social strata and in China there is a big demand for luxury products. I do not know what the ratio is but the demand is there and it is rising." MAN TAKING PHOTO OF TITANIC WATCH WITH PHONE WATCH FACE WATCH IN VACUUM CASE POSTER OF TITANIC WATCH TITANIC WATCH TICKING (SOUNDBITE) (English)
- Embargoed: 8th December 2008 12:00
- Keywords:
- Location: China
- Country: China
- Topics: Economic News
- Reuters ID: LVA6EKO9D23RDL227VQ32OLSA398
- Story Text: Fast cars and glamorous models greet Beijing's high rollers and curious onlookers this week.
'Top Essence' aims at showcasing some of the world's most expensive items in one glittering exhibition to tap into the China market.
Top Essence is the dream-child of exhibition organiser Borrison Expo Ltd., It drew around 11,000 visitors to its 2007 Beijing show, said managing director Leon Sheng who estimates last year's sales at 500 million yuan (around 72 million U.S. Dollars).
As the economic crisis dampens spending abroad, Sheng is confident in China's big spenders and believes that China is where foreign luxury brands will increase their focus. This year, around 15 more luxury brands have added their stalls to the fair, he said.
"So this emerging market is very important for the luxury brands and, as you see, the world economy is suffering from the recession but Chinese people are still very passionate about the luxury brands. As you see, most of the brands are here, very proactive, and I don't think this happens in a lot of other places in Europe or America," said Sheng.
High earning business men and local celebrities watched as models strutted down the catwalk in Italian cashmere sweaters tagged at several hundred U.S. Dollars apiece. The fashion show was used to exhibit a wide range of products--from conventional luxury goods to luxury German kitchenware.
China is struggling to cope with a widening gap between the rich and poor. The groomed visitors and extravagant price tags set a stark contrast to the low paid workforce that make up a large part of China's one billion strong population. Li Pengchuan, who works for a Beijing-based German company, said he was aware of the issue and had noticed the growing demand, amongst the rich, for material wealth.
"There is certainly a social strata and in China there is a big demand for luxury products. I do not know what the ratio is but the demand is there and it is rising," he said, admitting it would be several more working years before he could afford any of the items on show.
Swiss watch maker Roman Jerome had brought their Titanic DNA watches to China for the first time--they sell at 8000 U.S. dollars per piece or more.
The company said several orders had already been placed for the timepieces, which boast an outer case of rusted steel, taken from the sunken vessel.
Whilst Roman Jerome's biggest markets are still the Middle East and the United States, the brand could not afford to ignore China, said C.E.O. Yvan Arpa.
"So, its something very different, today my back order is for the three next years, so even if one year falls, I am pretty safe," said Arpa. He is planning his next range of watches, which will feature steel taken from Russian and U.S. space shuttles, with a smattering of moon dust.
Although he agreed his business could still suffer from the dip in spending, Arpa believed the novelty of owning a slice of the Titanic would pull his brand through the financial crisis.
For those who preferred to spend their money on an experience rather than a product, China Adventure Travel offered tailor-made hunting trips across the world, costing up to 1 million yuan (146,409 U.S. Dollars). The organisation, teamed with its taxidermist partner company, had brought polar bear pelts and mounted stag heads to advertise the hunting trips it offered to its foreign and local customers.
Wang Wei, President of the China Adventure Travel, said he anticipated the backlash of the economic downturn in a few months time. But he believed his clientele would be relatively immune from the worst affects.
"I think that, when there is a depression, there will be some lows but sometimes the more well-to-do people are not particularly affected by the downturn, not badly," he said.
The global economic crisis has left China struggling to deal with factory closures and angry workers as demand from the West for goods decreases.
However, luxury goods vendors at the Top Essence fair are confident that their 3-day exhibition will increase their sales. - Copyright Holder: REUTERS
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