Global luxury industry banks on China for re-emergence

The year 2010 has seen the emergence and growth of one of the strongest markets for luxury industry in the world - China.

The Euro-zone crises that started in the early part of the year created alarm in the financial market affecting particularly the luxury goods and service sector.

Amid this chaos, a nation validated its rapid evolution from an emerging basic market into a well-established economic powerhouse.

According to the 2010 Hurun Rich List by the Hurun Research Institute in China, there are around 1,363 individuals with a property value of $150 million. Comparing this value to last year's statistic of 1,000 billionaires last year and only 24 a decade ago, one can estimate the rate at which the country has established itself at the peak of the global economy.

Forbes' latest list of rich people indicates that currently, there are more billionaires in China than any other country besides the US.

Today, China is one of the most important driving factors for growth of the luxury industry. In fact, the entire industry views the country as having the utmost potential for the next few decades.

What further instigates the driving capacity of the country is that, even the middle class is interested in luxury goods and willing to pay high prices for it. This is very unlike certain countries like India and Russia where only a certain section of the population tend to buy high-range products.

The 10th luxury conference held by the International Herald Tribune in November discussed the importance of heritage for the sustenance of a luxury brand.

This is another major factor that has the propelled the growth of the industry within China where, consumers pay strong focus on a brand's history or heritage.

As per many industry leaders, heritage plays a very important role in accelerating a brand's growth within the country.

Almost every sector within the luxury industry are betting on China to fuel their growth.

Leading American designer and maker of luxury lifestyle products, Coach Inc stated in their fiscal year earnings report that China is their biggest opportunity and they have started developing a multi-channel distribution model in the country. This includes retail stores, shop-in-shops and flagships.

Apart from this, strong demand for luxury cars in the country has bolstered sales for premium carmakers like Audi, BMW and Mercedes-Benz.

In addition to US and Swiss luxury markets, Japanese companies are also banking on China to propel their growth.

Cosmetic giant, Shiseido is working to strengthen the growing China business by targeting an average annual growth rate of 20 percent.

Surveys have indicated that the cosmetics market in China is anticipated to continue to expand, in which cosmetics users are expected to reach 100 million in 2010 and increase to around 200 million by 2015.