Economy of The People's Republic of China - Luxury Goods

Luxury Goods

A factor that often goes overlooked is the extent of luxury spending the Chinese citizenry are undertaking. There is no greater indication of the newfound wealth of the Chinese than the amount of money now spent on goods and services that were once inaccessible. Foremost among these is the shift towards bottled water. The Chinese bottled water manufacturing industry is forecast to more than double in size in 2008, becoming a $10.5 (US dollars) billion industry in the process. Meanwhile, as those who once had no recourse but poor-quality tap water take advantage of its availability in supermarkets, those who had little or no running water are now capitalising on its availability. The tap water production and supply industry is expected to grow by 29.3% in 2008, to $11.9 billion. The country's motor vehicle production industry is expected to expand by 29.5% to nearly $200 billion, as many Chinese eschew traditional modes of transport, such as bicycles, for the comforts of modern cars. Also, consumption of chocolate and other confectionery is set to increase by 24.3%, as the industry expands to $4.6 billion, in order to keep up with China's collective sweet tooth. Couple with this is 20.8% growth in China's fast food industry, as major players such as McDonald's enter the country with vigour. Also, the LVMH Group, who own major luxury brands including Louis Vuitton apparel, Moët & Chandon wines and champagne and Hennessy cognacs, reported earnings growth of over 25% in 2007 in China, the region now accounting for around 16% of their global business.