The price of luxury goods in China has grown year on year. A Hurun study indicates the rise in prices between June 2010-June 2011 was 7.73% as against the explosive 11.73% in the previous 12 month period (2009-10). One must remember that this price increase has happened in a recessionary period where most western markets have seen almost no price increases at all. However one could argue that this price increase is an inflationary trend seen in most BRIC or growing economies. Even here we see that the luxury consumer price index (LCPI) at 7.73% growth this year outstrips the general consumer price index (CPI) which stands at 6.4%.
But demand for luxury goods seems no signs of slowing down inspite of the high prices. Rich Chinese consumers are still queuing up for their share of $ 4.87 million Sunseeker yachts (up by 24%), bottles of 1982 Chateau Lafite at $62,000 (up 29%) and Beijing-Shanghai return trips on the Gulfstream G550 at $43,000 (up a modest 15.60%)
It would be interesting to study the comparative figures in traditional luxury markets in the West and Japan to analyse the trends in the industry. It may well provide insights into how markets for luxury products will involve in a rapidly growing economy and will prove valuable to develop strategies to address future growth in Brazil, Russia and India as well
Meanwhile the insatiable thirst for luxury goods in the east will be welcome news for luxury goods manufacturers in the west currently reeling under recession.
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