The Prospect Of Luxury Goods In China Is Still Optimistic.

Italy's luxury brand Prada reported in December 15th that its quarterly profit fell by 38%, mainly due to a drop in sales in the Greater China region.

The hard struggle of British luxury brand boboley in China often frightens investors.

However, in 2015, the prospect of luxury brands in China is still optimistic, mainly due to China's growing strength.

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Stock research firm Morning Star Inc predicts that with the growth of China's middle class, these people will increasingly buy those "luxury goods that they dream of".

The family defined by the company as "the lower middle class" will expand from 32 million in 2012 to 133 million in 2022.

The "upper middle class" will also grow from 13 million to 31 million households.

The two add up that in the next ten years, 119 million new middle class families will be born in China.

According to the definition of the report, the annual income of the "middle class lower class" is 100 thousand to 200 thousand yuan, and the annual income of the upper middle class can reach 200 thousand to 500 thousand yuan.

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As the overall economic growth slows down, the sum of money held by the middle class is also considerable.

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The GPD growth rate of the report is incredible, and the growth rate of the Chinese economy seems to be lower than the official recognition rate is 6.9%.

But even so, it is undeniable that China's economy is still on the rise.

Morning Star Inc's research shows that GDP growth is 2% lower than official figures, but the company still predicts that the consumption of luxury goods purchased by Chinese people will increase by 8% annually.

In Morning Star Inc's view, the most profitable brands will be those expensive but not too expensive brands, such as Ralph Lauren, Cox and Tiffany.

Because these brands are cheaper than Gucci's first-line brands, people will consider them as the entry level choice of luxury goods.

In addition, the awareness of these brands in China is not high, which also gives them a lot of room for growth.

Bo Boli is another potential winner, the report said.

Since 2013, the Asia Pacific region has become the largest market of Boboli.

Although the price is slightly higher than some of the brands mentioned above, it is still slightly lower than other European brands.

At the same time, the brand also has strong network strategy to help.

As the middle class is increasingly keen on online shopping, it will also help the company get a slice of the Chinese luxury market.

Morning Star Inc is not the only company that believes China's growing middle class will benefit the luxury sector in the long run.

The sharp depreciation of the renminbi in August of this year has stirred up a slight panic among luxury investors. Deutsche Bank has decided to assess the situation. The result is that the fluctuation is positive in the short to medium term, but in the long run, the situation is more optimistic.

The report said: "the powerful Chinese middle class will provide a strong driving force for the growth of luxury demand for many years."