Today might be a slow news day here in the U.S., but WWD went all the way to China with not one but three stories about store expansions and luxury brands opening in the Middle Kingdom — right in time for the Olympics! Adidas, ready to cash in on the sports fervor gripping the nation, threw open the doors to its first-ever Beijing flagship on Saturday. Fitting, as the brand spent $80 million so far to be a sponsor of the Games. The store, at 34,000 square feet, is the biggest ever for Adidas, and 1,000 more stores are planned by the year 2010. Go for the gold!
Jumping into the mix is Cynthia Rowley, whose new store joins other fashiony ones like Vivienne Westwood and Calvin Klein on Hong Kong's Fashion Walk area. All this expansion comes right on the heels of a report by market consultancy firm KPMG China on China's luxury consumers, reports WWD.
The report suggests China's luxury market has become more mature and sophisticated, but also more saturated and segmented. Competition — for customers, retail space and staff — has become more intense as ever more brands pile into the market. Although many luxury brands see China, with its huge population and rising incomes, as the new El Dorado, only a few are striking gold here.
With the average per capita income for the richest residents of Beijing clocking in at about $3,600 (U.S.) according to ChinaDaily.com, who's buying luxury items? Especially when a bag can cost a couple thousand bucks? Apparently, middle-class consumers, and guess why? "Status is still the primary motivation for consumers across China," observed Giovanni Di Salvo of StraBranding in a profile. Ahh yes, fashion and the need to one-up each other — it unites us all. —Amina Akhtar