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Burberry Wants to Expand to 100 Stores in China

Burberry is a British luxury fashion house, distributing clothing and fashion accessories and licensing fragrances. Its distinctive tartan pattern has become one of its most widely copied trademarks. After the Lehman crisis, the world luxury brands all shifted their sales center to China, hoping this growing consumer entity can pull up their sales figure. Like most of the luxury brands, Burberry chose Shanghai to be its base in China. On April 13^th 2011, Burberry opened its Beijing flagship store. According to the CEO Angela Ahrendts, Burberry already has 63 stores in China and plans to expand to 100 stores.

Burberry Sales Decelerate in Asian-Pacific Region

According to Burberry’s quarterly business report, this year from April to June, sales in the Asian market increased by 18 percent, showing a abrupt deceleration from the 34 percent growth rate between October 2011 and March 2012. Because the Asian-Pacific market takes up 40 percent of its sales, the biggest share of all its markets, this deceleration led the Burberry stock go down by over 7 percent in London Market. It is easy to see that as 90 percent of the world’s well-known luxury brands come to China, this soon-to-be biggest luxury market provides these brands with huge business opportunities as well as underlying risks. The GDP growth rate of China between April to June this year for the first time in three years comes down below 8 percent. This may work as a signal to ask whether all these luxury brands should still rely on China to give them their biggest prospective growth.

Chinese Shoppers Became the Kings of Consumers in London Olympics

Although the luxury market may slow down its growth here in China, Chinese people’s desire for luxury goods still shocks the world. The just-ended London Olympic Games surely brought the UK enormous amount of travelers and consumers. According to statistics, 250 thousand Chinese went to London to watch the Olympics and the average spending of Chinese tourists exceeds that of UAE(United Arab Emirates) tourists by 10 percent. Most of the famous luxury stores were equipped with Chinese shopping guides waiting for the large streams of ‘generous’ Chinese customers and Unionpay, the widely used Chinese credit card, can be used almost in every one of the stores. You can guess which brand drew the highest attention. Of course it is the British traditional luxury brand Burberry. Almost every model that was on sales was sold out in a few seconds. That’s the purchasing power of the ‘fashion crazy’ Chinese.

Sources:

•  Official website
• The Independent
• Forbes
• CNBC
• Market Research services China