Bags and Luggage in China

PROSPECTS

Increasing inbound and outbound tourism fuels demand

Bags and luggage in China registered stable retail current value growth in 2018 as the boom in tourism continued to drive demand. According to data from the Ministry of Culture and Tourism of the People’s Republic of China, domestic tourist numbers increased by 13% in 2017 while the number of outbound tourists rose by 7%.

Affordable luxury brands offering personalisation gain popularity

Younger consumers purchasing bags and luggage products favour trendy designs and affordable prices, and the opportunity to personalise items to allow them to convey their unique style. This growing consumer group favours new and seasonal products from renowned affordable luxury brands such as Tory Burch, Coach, Michael Kors and Kate Spade.

Innovative marketing to be widely implemented

“Experience” bags and luggage stores associated with innovative marketing continued to gain ground, further driven by manufacturers’ adopting multiple strategies to reach wider consumer bases and enhance brand awareness. In late 2017, for instance, Folli Follie Group, with a consumer-centric marketing plan, set up its first upgraded brand store in Beijing that offered decent in-store customer service and upgraded decor.

COMPETITIVE LANDSCAPE

LVMH Fashion (Shanghai) Trading Co Ltd remains the leader

LVMH Fashion (Shanghai) Trading Co Ltd, with well-known brands Louis Vuitton and Céline, registered stronger double-digit retail current value growth in 2017 due to factors including local currency depreciation, global political issues and downward adjustment of import tariffs on luxury goods by the Chinese government. The company’s performance was also underpinned by its launch of online sales under high-end brand Loewe on Tmall.

Fragmented category led by international corporations

Fragmentation in the category increased with the entry of more local brands. However, in 2017, the top 10 players were all international corporations with broad product ranges and good reputations.

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