China is without a doubt a pressing point on any CEO's agenda. Luxury brands, in particular, have an invested interest in the region.
On a recent trip to Shanghai I was not only impressed by the number of luxury flagship stores, but by their size and the number of people shopping in them. Specifically, I was amazed that so many luxury stores have plans to open soon.
With the World Expo in Shanghai set to start in May of this year, it appears that global luxury brands have kicked their China expansion plans into high gear.
There’s impressive architecture all round. Just a few examples (all located within 20 meters of one another), include a temporary facade that resembles the iconic Tiffany's box, a pinstriped, four-story, architectural statement by Ermenegildo Zegna, and a LED technology facade for Cartier’s upcoming store.
With projections that show that China is poised to show growth rates of over 10 percent for luxury goods (Bain & Company) in 2010, this expansion should not come as a surprise. However, while the careful first steps of several, iconic flagship stores might be expected, it now seems like a full-scale market rollout is in progress. And among the predictable, international players you can also find several up and coming brands with Asian roots such as Annabel Lee and Shanghai Tang.
The next phase in China's luxury story, looks like it will not revolve around what is going into China, but what is coming out of it. With a credible heritage of exceptional tailoring and even more exceptional fabrics, Chinese luxury apparel brands will have fertile ground to build remarkably strong global brands.
Besides a strong heritage, Chinese aesthetics have always been attractive to the West—perhaps more so than the other way around. We will need to stay tuned to find out who the winners will be.
It will take some time, and more importantly, it will take international brand building skills. But there will be winners, and they will likely come from China.