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Fortune Character China Luxury Report 2012

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The definitive report on Chinese luxury consumption and habits as well as detailed information on global luxury brand penetration in China

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Page 1: Fortune Character China Luxury Report 2012
Page 2: Fortune Character China Luxury Report 2012
Page 3: Fortune Character China Luxury Report 2012

Chapter(Four(–(Distribution(Channels(of(Luxury(Brands(in(China(

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Chapter(Five(–(Promotion(of(Luxury(Brands(in(China(

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Chapter(Six(–(Customer(Relationship(Management(for(Luxury(Brands(in(China!���-:8I>DC�)C:���=>C:H:�8DCHJB:GH��7G6C9�ADN6AIN�8DBE6G>C<�ID�;DG:><C:GH����-:8I>DC�.LD��,:6HDCH�;DG�ADL�ADN6AIN�6BDC<��=>C:H:�8DCHJB:GH���-:8I>DC�.=G::��'6>C�8DBEA6>CIH�6BDC<��=>C:H:�8DCHJB:GH�67DJI�I=:�H:GK>8:H�;GDB�AJMJGN��������������������������������7G6C9H�>C��=>C6�

Chapter(Seven(–(A(Long(Way(to(Go(for(Chinese(Local(Luxury(Brands!�������=>C:H:�8DCHJB:GH[�8DC\9:C8:�>C��=>C:H:�AD86A�AJMJGN�7G6C9H�������DBE:I>I>K:�69K6CI6<:H�;DG��=>C:H:�AD86A�AJMJGN�7G6C9H�������)EEDGIJC>I>:H�ID�9:K:ADE��=>C:H:�AD86A�AJMJGN�7G6C9

Fortune(Character(Lists

Appendix(

About(us(

063

064076084

094

095105

111

112114121

123

124125126

129

130

137

Page 4: Fortune Character China Luxury Report 2012

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Page 5: Fortune Character China Luxury Report 2012

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International(luxury(brands(are(now(either(

acquiring(or(merging(with(Chinese(brands,(

or( they(are( launching( subsidiaries(or(

products(with(Chinese(elements.

#CI:GC6I>DC6A�AJMJGN�7G6C9H�=6K:�JI>A>O:9�I=:>G�69K6CI6<:H� >C�86E>I6A�6C9�HIGDC<�7G6C9� G:EJI6I>DCH� ID� 9>G:8IAN� 68FJ>G:�:M8:EI>DC6A�AD86A�7G6C9H�6C9�I=:C�9:EADN�I=:B�6I�6� HIG6I:<N� A:K:A� ID� G:>C;DG8:�>C9JHIG>6A� 8DBE6G6I>K:� 69K6CI6<:H��)C8:� I=:� AD86A�7G6C9� >H�67HDG7:9�7N�I=:�>CI:GC6I>DC6A�AJMJGN�7G6C9H�I=:�AD86A�7G6C9� >H� :>I=:G� ;JGI=:G� 9:K:ADE:9� ID�8DJCI:G� I=:>G�8DBE:I>IDGH�DG� A6>9�6H>9:�?JHI�ID�G:9J8:�8DBE:I>K:C:HH�)7K>DJHAN�8DDE:G6I>C<�L>I=�>CI:GC6I>DC6A�7G6C9H�>H�DC:�D;�I=:�6K:CJ:H��=>C:H:�7G6C9H�86C�G6E>9AN�9:K:ADE�

Chinese(luxury(brands(are(gradually(

earning(its(place(in(the(competition

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1:�=6K:�G:6HDCH� ID�7:A>:K:� I=6I� >C� I=:�C:6G� ;JIJG:� I=:G:�L>AA� 7:� 6�CJB7:G� D;�AJMJGN� 7G6C9H� I=6I� L>AA� :B7D9N� � �

N:6GH�D;��=>C:H:�8JAIJG:��.=:H:�7G6C9H�L>AA�=6K:�6�<AD76A�>C]J:C8:�6;;:8I>C<�I=:�E6II:GC�D;� I=:�:CI>G:� AJMJGN� >C9JHIGN�6C9�:CHJG>C<��=>C6�ID�EA6N�6�BDG:�H><C>\86CI�GDA:�

Chinese(capital(has(started(to(enter(

international(luxury(brand’s(board(of(

directors,(acquisition(is(prevailing

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.=:H:�68FJ>H>I>DCH�6IIG>7JI:� ID�6�7:II:G�JC9:GHI6C9>C<� D; � AJMJGN� <DD9H� ;DG��=>C:H:�:CIG:EG:C:JGH�6C9�:CI:GEG>H:H�6C9�7GD69:C� I=:>G�L6NH� ID�:CI:G� I=:�>CI:GC6I>DC6A� AJMJGN�B6G@:I� L=>8=�6AHD�JC9:GA>C:H� I=:� >C;AJ:C8:�EDL:G�D;��=>C:H:�86E>I6A� >C� I=:�9:8>H>DCB6@>C<�EGD8:HH�D;�>CI:GC6I>DC6A�AJMJGN�7G6C9H�

The ( largest ( f lagship ( stores ( o f(

numerous(international(luxury(brands(

are(opened(in(China

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1.(Sinification(of(Brand(Building

Page 6: Fortune Character China Luxury Report 2012

003 �"#(��&/2/,3�,�*),.

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2.(Designing(for(China

Forming(Chinese(design( teams(or(

cooperating(with(Chinese(designers(

and(artists

#I� >H� CD� ADC<:G� JC8DBBDC� ID� H::� 6��=>C:H:� ;68:� >C� AJMJGN�7G6C9H[�9:H><C�I:6BH�� �><� 7G6C9H� HJ8=� 6H� �>DG�":GBSH� :GG6G>� 6C9�B6CN� DI=:GH�=6K:� 6AHD� HI6GI:9� 8DDE:G6I>C<� L>I=��=>C:H:�9:H><C:GH�6C9�6GI>HIH��.=:H:�8DAA67DG6I>DCH�<D� ;6G�7:NDC9�EGD9J8I�9:H><C�HDB:�9:H><C:GH�:K:C�7:8DB:�7G6C9H[�HED@:HE:GHDCH�

Fully(adopting(Chinese(elements(

in(design

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Chinese( luxury(brands(with(strong(

Chinese(design(elements(are(now(

being(widely(recognized

�=>C:H:�AJMJGN�7G6C9H�6G:�>C8G:6H>C<AN�JH>C<�JC>FJ:��=>C:H:�:A:B:CIH�HJ8=�6H�I:6�A:6K:H�EDG8:A6>C�H>A@�6C9�HD�DC�>C�I=:>G�9:H><CH��.=:N�8JGG:CIAN�G:EG:H:CI�

I=:� AJMJGN�9:H><C�6:HI=:I>8�D;��=>C:H:�8JAIJG:� 6C9� 6G:� <DD9� :M6BEA:H� D;�G:;:G:C8:�;DG�>CI:GC6I>DC6A�AJMJGN�7G6C9H�

3.(Manufacturing(in(China

Establishing(a( factory( in(China(or(

choosing(a(Chinese(OEM

�>G:8IAN�>BEDGI>C<�;GDB�67GD69�=6H�7::C�DC:�D;� I=:�L6NH� >CI:GC6I>DC6A� AJMJGN�7G6C9H�JH:�ID�:CHJG:�8DCH>HI:CI�FJ6A>IN�D;� I=:>G�EGD9J8IH��"DL:K:G� I=>C<H�=6K:�8=6C<:9�6H�B6CN�7G6C9H�=6K:�HI6GI:9�JH>C<� I=:�)�'� �DG><>C6A� :FJ>EB:CI�B6CJ;68IJG >C<� � HIG6I:<N� L=:G:>C�EGD9J8IH�6G:�B6CJ;68IJG:9�9DB:HI>86AAN�6C9�6HH:B7A:9�67GD69���AI=DJ<=�6� ADI�D;�7G6C9H�9D�CDI�69B>I�I=>H�6C9�>CHI:69�IGN� ID� 8DC8:6A�� #I � >H� 6� IGJI=� L>9:AN�68@CDLA:9<:9�I=6I�CD�7G6C9�86C�><CDG:��=>C6[H�8=:6E�A67DG�6C9�ADL�>CI:AA:8IJ6A�EGDE:GIN�8DHIH�

Sourcing(raw(materials( from(China,(

par ticularly ( those( with( intense(

Chinese(elements

'6CN� G6L�B6I:G>6AH�6C9�688:HHDG>:H�6G:� 8=:6E:G� >C��=>C6� I=6C� 67GD69�:HE:8>6AAN� I=DH:�L>I=��=>C:H:�:A:B:CIH�HJ8=�6H�H>A@�LDK:C�B6I:G>6AH��=>C:H:�I:6� EDG8:A6>C� 6G:�BJ8=� ;6KDG:9�7N�>CI:GC6I>DC6A� AJMJGN� 7G6C9H�� .=>H� >H�CDI� 8DC;>C:9� ID� ?JHI� G6L�B6I:G>6AH�6� ADI� D;�EGD9J8IH�6G:�68IJ6AAN�L=DAAN�B6CJ;68IJG:9�>C��=>C6�6C9�I=:C�A67:A:9�L>I=� I=:� IG69:B6G@�D;� I=:� >CI:GC6I>DC6A�AJMJGN�7G6C9�

Page 7: Fortune Character China Luxury Report 2012

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4.(Distribution(in(China

Building( their ( own( distribution(

channels(and(reducing(or(getting(rid(

of(Chinese(agencies

.=:�DE:G6I>C<� G><=IH�9>HEJI:�7:IL::C�'DCI7A6C8�6C9� I=:�-=6C<=6>�!G68>C<�!GDJE� >H�6C�:M6BEA:�D;� >CI:GC6I>DC6A�AJMJGN� 7G6C9� L>I=9G6L>C<� 9DB:HI>8�9>HIG>7JI>DC�G><=IH��#C�DG9:G�ID�HIG:C<I=:C�7G6C9� B6C6<:B:CI � 9>H I G >7JI >DC�8=6CC:AH� 6C9� 8JHIDB:G� H:GK>8:� >C��=>C6�B6CN�7G6C9H�8=DDH:�ID�L>I=9G6L�DE:G6I>C<� EG>K>A:<:H� ;GDB� 9DB:HI>8�6<:CIH�6C9�=6C9A:� I=:>G�DJIA:IH�9>G:8IAN�>CHI:69�� .=>H � >H � DC:� D; � I=:� BDHI�>BEDGI6CI� IG6CH>I>DCH� >C� >CI:CH>;N>C<�AJMJGN� >C��=>C6�L=:G:� AJMJGN�7G6C9H�6G:� 8=DDH>C<� ID� >CKDAK:� I=:BH:AK:H�BDG:�6C9�B6C6<:�9>G:8IAN�CDI�DCAN� ID�=6K:�6�7:II:G�JC9:GHI6C9>C<�D;��=>C:H:�8DCHJB:GH� 7JI� 6AHD� >C8G:6H:� I=:>G�B6G@:I�H=6G:�6C9�EGD;>I�B6G<>CH�

Store(penetration( in( second( and(

thirdVtier(cities,(while(some( luxury(

brands(build(stores(in(nonVCBD(areas

*=NH>86A�HIDG:�H6A:H�LDJA9�;DG�6�8:GI6>C�ADC<� I>B:�G:B6>C�6H� I=:�B6>C�8=6CC:A�;DG�AJMJGN�<DD9H�9>HIG>7JI>DC��.=:�AJMJGN�7G6C9H�HI6N�6A:GI�6C9�HE6G:�CD�:;;DGI�H8DJI>C<�;DG�EG>B:�HIDG:�AD86I>DCH�

�� ;6BDJH� >CI:GC6I>DC6A� AJMJGN�7G6C9[H�<AD76A���)�DC8:� H6>9�� X#C� � ��� DJG�<AD76A� B6G@:I � ;D8JH� >H � DC� �=>C6�E6GI>8JA6GAN� >C� H:8DC9� 6C9� I=>G9� I>:G�8>I>:H�Y� #CI:GC6I>DC6A� AJMJGN�7G6C9H�6G:�CD� ADC<:G�H6I>H;>:9�L>I=� I=:�CJB7:G�D;�

HIDG:H� I=:N�=6K:� >C� I>:G�DC:�8>I>:H�6C9�=6K:�69DEI:9� X;>GHIBDK:G�69K6CI6<:Y�>CID�I=:>G�B6G@:I>C<�HIG6I:<>:H�:ME6C9>C<�>CID�H:8DC9�6C9�I=>G9� I>:G�8>I>:H���K:C�CDC����AD86I>DCH� >C� I=:H:�6G:6H�CDL�=6K:�>CI:GC6I>DC6A�AJMJGN�7G6C9�HIDG:H�E6GI>8JA6GAN�>C�\K:HI6G�=DI:AH�6C9�AJMJGN�8AJ7=DJH:H�

More(international(luxury(brands(are(

creating( their(Chinese( versions(of(

eVcommerce(sites

�AI=DJ<=�86E>I6A�L6H�L:AAG:8:>K:9� >C�I=:��=>C:H:�AJMJGN�:8DBB:G8:�B6G@:I�>I�HI6GI:9�L>I=�6�76C<�7JI�:C9:9�L>I=�6�L=>BE:G��(:K:GI=:A:HH�9:HE>I:� I=:�A68@�D;�68=>:K:B:CIH� >I� >H� HI>AA� 6�7JH>C:HH�BD9:A� L>I=� 6� ADI � D; � EDI:CI>6A� 6C9�E:GHE:8I>K:��#CI:GC6I>DC6A� AJMJGN�7G6C9H�6I� I=>H�ED>CI�6G:�JCL>AA>C<� ID�7:�DJI9DC:�6C9�=6K:�B69:� I=:>G�EGD9J8IH�9>G:8IAN�6K6>A67A:�6I� I=:>G� D;;>8>6A�L:7H>I:H�DG�H:I�JE� H=DE�DC�EDEJA6G� :8DBB:G8:�EA6I;DGBH���8DBB:G8:� >H� 7G>C<>C<�>CI:GC6I>DC6A� AJMJGN�7G6C9H� 8ADH:G� ID��=>C:H:�8DCHJB:GH���

Starting( to(cooperate(with(Chinese(

logistics( providers,( while( some(

consider ( establishing( their ( own(

logistics(and(distribution(system

#C� I=:� :6GA>:G� E=6H:� D;� :CI:G>C<� I=:��=>C:H:�B6G@:I�B6CN� AJMJGN�7G6C9H�=6K:�HDJ<=I�8DDE:G6I>DC�L>I=�G:EJI67A:�>CI:GC6I>DC6A� AD<>HI>8H� 8DBE6C>:H��(:K:G I=:A:HH� 6H� �=>C:H:� AD<>HI>8�8DBE6C>:H�6G:�69K6C8>C<� I=:� AJMJGN�:8DBB:G8:�B6G@:I�=6K:� >BE:C9:9�EG:HHJG:H�DC� I=:H:�7G6C9H�6C9�H>C8:�8DHIH� 6G:� 6AHD� >C8G:6H>C<�BDG:�6C9�

Page 8: Fortune Character China Luxury Report 2012

005 �"#(��&/2/,3�,�*),.

),�1),�

BDG:�8DBE6C>:H�6G:�H::@>C<� ID�LDG@�L>I=� �=>C:H:� AD<>HI>8H� 8DBE6C>:H�>CHI:69�� �><� >CI:GC6I>DC6A� AJMJGN�<GDJEH�6G:�:K:C�H::@>C<� ID�:HI67A>H=�I=:>G� DLC� AD<>HI>8H� 6C9� 9>HIG>7JI>DC�HNHI:BH� ID� :CHJG:� I>B:AN� 688JG6I:�6C9�:;;>8>:CI�H:GK>8:�

5.(Service(in(China

Establishing(independent(service(centers(

globally(and(launching(special(services(

especially(for(Chinese(customers

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Increasing( service( agencies( and(

customer( service( teams,( greater(

focus(is(now(given(to(the(training(of(

professional(service(staffs

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6.(Communications(in(China

Shifting(from(reliance(on(international(to(

� ������������$!������*������!# /���������titles(targeting(the(Chinese(wealthy

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Page 9: Fortune Character China Luxury Report 2012

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Shif ting( from( sole( dependence(

on( international( advertising( and(

public( relations( (PR)( agencies( to(

gradually(building(trust(with(Chinese(

adver t ising( and( PR( agenciesZ(

Beginning(to(fully(leverage(the(local(

advantages(of(Chinese(advertising(

and(PR(agencies

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Transitioning(from(using(international(

spokespersons( to(more(Chinese(

spokespersons

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Establishing(professional(publications(

for( the(Chinese(market,(primarily( in(

the(form(of(internal(magazine

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Emphasizing( communications( in(

circles,( paying( attention( to( the(

impact(of(key(opinion( leaders(and(

hosting(more(activities( for(Chinese(

wealthy(groups.

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Page 10: Fortune Character China Luxury Report 2012

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Emphasizing( consumer( training,(

more(brands(are(providing(Chinese(

customers(with( information(about(

their(products(as(well(as(culture(and(

lifestyle(activities

�=>C:H:�8DCHJB:GH[� >BB6IJG:�6II>IJ9:�IDL6G9H� 8DCHJBEI>DC� B6N � 7:� I=:�7><<:HI�8=6AA:C<:�;DG�AJMJGN�7G6C9H�L=:C�:CI:G>C<� I=:�B6G@:I�=DL:K:G� >I� >H�6AHD�I=:>G�7><<:HI�DEEDGIJC>IN��.=>H�>BB6IJG>IN�B6@:H� :K:C� I=:� 7:HI� AJMJGN� 7G6C9H�;6>A� ID�EGDBDI:� ID��=>C:H:�8DCHJB:GH��"DL:K:G� >I� >H� I=:�H6B:�>BB6IJG>IN� I=6I�B6@:H� 69H� >C��=>C6�BDG:� K6AJ67A:���� <DD9�EGDBDI>DC�=6C9� >C�=6C9�L>I=�6<<G:HH>K:�B:9>6� EA68:B:CIH� LDJA9�<:C:G6AAN�A:69H�ID�<DD9�B6G@:I�;::9768@�

1=6I:K:G�I=:�G:6HDC�>H�L:�H::�H:K:G6A�AJMJGN�7G6C9H� ;D8JH:9�DC� IG6>C>C<� I=:>G�8DCHJB:GH��1>I=�I=>H�HIG6I:<N�I=:N�=DE:�CDI�DCAN� ID�B6@:�8DCHJB:GH�JC9:GHI6C9�I=:>G�=>HIDGN�6C9�8JAIJG:�7JI�6AHD�@CDL�=DL� ID� 8DCHJB:� I=:>G � EGD9J8IH� 6C9�H:GK>8:H� >C� K6G>DJH�L6NH�7G>9<>C<� I=:�<6E�7:IL::C��=>C:H:�8DCHJB:GH�6C9�AJMJGN�7G6C9H�6H�L:AA�6H�:ME6C9>C<� I=:>G��=>C:H:�8JHIDB:G�76H:�

7.(Teams(in(China

Professional(Chinese(managers(are(

more(involved(in(senior(management(

level(of(international(luxury(brands,(this(

is(particularly(common(in(China(region

�� ; :L � N:6GH � 6<D� ; DG:><C� ; 68:H�9DB>C6I:9� I=:�B6C6<:G>6A�EDH>I>DCH�D;�AJMJGN�7G6C9H� >C��=>C6�DG��H>6�*68>;>8�G:<>DC���AI=DJ<=� I=:G:�B><=I�7:�HDB:��=>C:H:� ;68:H�BDHI�D;� I=:B�6G:�DCAN�EA68:9�6I� 6��>G:8IDG� A:K:A� L>I=� DCAN�6� ;:L�L>I=� 6�!:C:G6A�'6C6<:G� I>IA:��"DL:K:G� I=:G:�6G:�6�ADI�D;�EG:HI><>DJH�AJMJGN � 7G6C9H� >C� �=>C6� I=6I � =6K:�H>C>8>O:9�I=:>G�I:6BH�>C��=>C6���M6BEA:H�D; � L=>8=� 6G:��HIDC�'6GI>C�H� 4=:C<�$>CA6C��DII:<6� 0:C:I6�H�!6D� :C<�*6I:@�*=>A>EE:[H�!6D�"DC<��O>BJI[H��6>�'>C<�6C9�HD�DC��-DB:�=6K:�:K:C�?D>C:9�I=:�<AD76A�B6C6<:B:CI�I:6BH�

Mastery ( of ( Mandarin( becomes(

luxury( brands’( prerequisite( for(

foreign(employees

.D96N�BDG:�6C9�BDG:� AJMJGN�7G6C9H�G:FJ>G:� ;DG:><C� HI6;;H� ID�JC9:GHI6C9�B6C96G>C��.=:G:�6G:�6AG:69N�6� ADI� D;�;DG:><C�AJMJGN�7G6C9�:BEADN::H�=6K>C<�6�HDA>9�JC9:GHI6C9>C<�D;� I=:� A6C<J6<:��*GD; >8>:C8N� >C�B6C96G>C� >H� CDL� 6�EGD;:HH>DC6A�688DBEA>H=B:CI�D;� AJMJGN�7G6C9H[�;DG:><C�HI6;;H�

International( luxury( brands( are(

starting( to(pay(more( attention( to(

cultivating( their(Chinese( team,(with(

some(brands(placing( significant(

Page 11: Fortune Character China Luxury Report 2012

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meetings(in(China,(especially(some(

marketing(meetings

.=:��=>C:H:�B6G@:I�=6H� G:E:6I:9AN�6C9�B>G68JADJHAN�7GD@:C�G:8DG9H�6C9�=6H�7:8DB:�6�B6G@:I�BD9:A� ;DG�6� ADI�D; � 7G6C9H�� .=:N� I=:G:;DG:� 6G:� CDL�8=DDH>C<� ID�=DHI�<AD76A�B6C6<:B:CI�B::I>C<H� >C��=>C6� G6I=:G� I=6C� I=:>G�=:69FJ6GI:GH�:HE:8>6AAN� ;DG�B6G@:I>C<�8DC8:GCH��.=>H�:C67A:H�:BEADN::H� >C�AJMJGN�>C9JHIGN�ID�@CDL�6C9�JC9:GHI6C9�I=:��=>C:H:�B6G@:I� ID� HDB:�:MI:CI�E6GI>8JA6GAN� ;DG� I=DH:� I=6I�EA6N�6� K>I6A�GDA:�>C�I=:�G:<>DC�

e f f or t s ( in ( building ( their ( own(

professional(training(schools

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8.(Management(in(China

A(clear(trend(in(the(market:(more(and(

more(luxury(brands(are(choosing(to(

move(their(AsiaVPacific(headquarters(

and(managerial( decisionVmaking(

powers(from(Hong(Kong(to(Shanghai

1>I=� I=:� G6E>9� 9:K:ADEB:CI� D; � I=:��=>C:H:�B6>CA6C9�B6G@:I� I=:� AD86I>DC�69K6CI6<:�D;�"DC<�%DC<�=6H�7:8DB:�BDG:� D7H8JG:�� .=:G:;DG:� >I� L>AA� CDI�7:� ADC<� 7:;DG:� -=6C<=6>� 7:8DB:�I=:� AJMJGN�B6C6<:B:CI� 8:CI:G � D;��=>C6�6C9� I=:��H>6*68>;>8� G:<>DC����ADI�D;�7G6C9H�=6K:�6AG:69N�HI6GI:9� ID�G:AD86I:� I=:>G�=:69FJ6GI:GH� ;GDB�"DC<�%DC<� ID�-=6C<=6>�DG�=6K:� IG6CH;:GG:9�B6C6<:G>6A�9:8>H>DCB6@>C<�EDL:GH� ID�-=6C<=6>��.=>H�6>BH�6I� HIG:C<I=:C>C<�I=: � B6C6<:B:CI � D ; � B6G@:I � 6C9�H:GK>8:H�>C��=>C6�

International( luxury( brands( are(

tending(to(hold(global(management(

Page 12: Fortune Character China Luxury Report 2012

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Chapter One 2012 Global Luxury Market

Page 13: Fortune Character China Luxury Report 2012

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Page 14: Fortune Character China Luxury Report 2012

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Page 15: Fortune Character China Luxury Report 2012

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Chapter TwoLuxury Map in China

Page 17: Fortune Character China Luxury Report 2012

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Section(One:(Current(storefront(situation(for(international(luxury(brands(in(China

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Page 18: Fortune Character China Luxury Report 2012

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IndexRank CityPer/Capita/Retail/Sales/of/Consumers/Goods

(Unit:RMB/10/Thousand)Rank City

Data/Source:/Fortune/Character/Group/Fortune/Character/Institute/analyzes/and/models/main/indicators/of/luxury/storefront/distribution,local/economic/development,/total/consumption,/wealthy/population/to/obtain/the/above/figures./All/the/data/are/derived/from/public/information.

Data/Source:/Fortune/Character/Group/Fortune/Character/Institute/generated/the/figures/from/total/retail/sales/of/consumer/goods/and/resident/population/of/each/city.

123456789101112131415161718192021222324252627282930

Hong/KongBeijingShanghaiMacauShenyangShenzenDalianHangzhouGuangzhouChengduHarbinKunmingTianjinQingdaoSuzhouChongqingNanjingTaiyuanXianWuhanWenzhouNingboChangshaXiamenChangchunZhengzhouWuxiUrumqiSanyaJinan

98.839.63921.813.812.411.61110.2108.88.287.87.276.65.85.65.65.24.84.44.44.243.63.43.43

123456789101112131415161718192021222324252627282930

HangzhouShanghaiShenzhenChongqingWuxiHohhotShenyangXi'anXiamenNanningBeijingDalianCantonNanjingChangshaJinanFuzhouTianjinQingdaoTaiyuanWuhanNingboChangchunUrumqiChangzhouChengduKunmingZhengzhouHarbinWenzhou

4.13.53.43.33.33.133332.92.92.92.72.72.72.72.62.62.32.32.32.32.22.22221.91.9

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Page 19: Fortune Character China Luxury Report 2012

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Low(saturation(of(luxury(storefront(

in(most(cities(allowing(huge(room(

for(development

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When(entering(China,(international(

luxury( brands’( f irst( storefront(

choices(are(in(Beijing(and(Shanghai

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Page 21: Fortune Character China Luxury Report 2012

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Page 22: Fortune Character China Luxury Report 2012

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Page 24: Fortune Character China Luxury Report 2012

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Page 25: Fortune Character China Luxury Report 2012

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2.(Watch(and(jewelry(brands

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Page 26: Fortune Character China Luxury Report 2012

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3.(Luxury(car(brands

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Page 27: Fortune Character China Luxury Report 2012

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Page 28: Fortune Character China Luxury Report 2012

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Page 29: Fortune Character China Luxury Report 2012

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A6G<:HI�CJB7:G�D;�N68=I�8AJ7H� >C�B6>CA6C9��=>C6�6C9�B6?DG� >CI:GC6I>DC6A�N68=I�7G6C9H�H:II>C<�JE�G:EG:H:CI6I>K:�D;;>8:H�HJ8=�6H�#I6AN[H��O>BJI�6C9� :GG:II>�6C9��C<A6C9[H�-JCH::@:G�:I8��-=6C<=6>�=:A9� I=:���I=�6CCJ6A��=>C6� #CI:GC6I>DC6A��D6I�-=DL�DC��EG>A���I=�� ���8DCIG>7JI>C<�6C�JCEG:8:9:CI:9�6BDJCI�D;� IDI6A�IJGCDK:G�D;�,'������7>AA>DC�6�N:6GDCN:6G�>C8G:6H:�D;��� ��

,:AN>C<�DC�G:<>DC6A�69K6CI6<:H�6C9�B6G>C:�G:HDJG8:H�+>C<96D�=6H�7:8DB:�I=:�H:8DC9�BDHI�>BEDGI6CI�8>IN�;DG�9:K:ADE>C<�I=:�AJMJGN�N68=I�>C9JHIGN���H�I=:�A6G<:HI�:8DCDB>8�8>IN�D;�I=:�-=6C9DC<�E:C>CHJA6�=><=:C9�H:GK>8:�>C9JHIG>:H�;DG�AJMJGN�EGD9J8IH�H::�<G:6I�9:K:ADEB:CI�EGDHE:8IH�

.=:�:MEADH>DC�D;� I=:� N68=I�B6G@:I� >C��=>C6�DC�DC:�=6C9�6IIG>7JI:H� ID� I=:�9:K:ADEB:CI�D;� I=:� G:6A�:HI6I:�B6G@:I�L=:G:� I=:N�JH:�N68=IH�6H�6�H:AA>C<�ED>CI� ;DG�BDJCI6>C�K>:L�6C9�L6I:G;GDCI�B6CH>DCH���)C� I=:�DI=:G�=6C9� >I� >H�6�8DCHJBEI>DC�JE<G69:� ;DG� I=:�L:6AI=N�EDEJA6I>DC� ;GDB� AJMJGN�86GH� ID� AJMJGN�N68=IH�� >C6AAN�I=:�;DG:><C�N68=I�B6G@:I�>H�H6IJG6I:9�>CI:GC6I>DC6A�N68=I�7G6C9H�;AD8@�>CID��=>C:H:�B6G@:I�ID�;JGI=:G�9:K:ADE�I=:�N68=I�B6G@:I�.=:�N68=I�B6G@:I�>C��=>C6�=69�N:6GH�D;�688JBJA6I>DC�6C9�>H�G:69N�;DG�I=:�G6E>9�<GDLI=�

Page 30: Fortune Character China Luxury Report 2012

027 �"#(��&/2/,3�,�*),.

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Section(Three:(Decrease(of(sales(for(international(luxury(brands(in(2/3(V(tier(cities

� ��� >H�6� IJGC>C<�ED>CI�6C9�6C�:K:C�BDG:�9>;;>8JAI� N:6G� ;DG� I=:��=>C:H:� AJMJGN�B6G@:I��.=:�9>HI>C8I� AJMJGN�B6G@:I� >H� ;6HI�C:L�6C9�=><=AN� K6G>67A:�6C9� >H� ;6G�7:NDC9�6�7G6C9[H�@CDLA:9<:�D;� I=:�B6G@:I���ABDHI�6AA� >CI:GC6I>DC6A� AJMJGN�7G6C9H�HIG:HH:9�>BEDGI6C8:�D;�I=:��=>C:H:�B6G@:I�6C9�=6K:�6�K>H>DC�ID�9:G>K:�BDG:�;GDB�H:8DC9�6C9�I=>G9I>:G�8>I>:H��"DL:K:G�L=>A:�A>B>IA:HHAN�6EEGD68=>C<�:C98DCHJB:GH�I=:N�=6K:�6AA�:C8DJCI:G:9�6�9>A:BB6�D;�B6HH�8DK:G6<:�

Troubles(with(penetrating(brand(recognition

&JMJGN�8DCHJB:GH�=6K:�7::C�HI:69>AN� >C8G:6H>C<� >C�H:8DC9�6C9� I=>G9I>:G�8>I>:H�7JI�I=:N�HI>AA�A68@�JC9:GHI6C9>C<�D;�AJMJGN�7G6C9H���G6C9�>C;DGB6I>DC�6C9�8DCHJB:G�>C;DGB6I>DC�6G:�HI>AA� 6HNBB:IGN� I=:G:���� IG6>I� D;��=>C:H:� AJMJGN�8DCHJB:GH� >H�I=6I� I=:>G�EJG8=6H:�76H:9�HIGDC<AN�DC�7G6C9� >BEG:HH>DC�L>I=�7G6C9�G:8D<C>I>DC�HI:BB>C<�BDHIAN� ;GDB�69K:GI>H:B:CIH��#C� ;>GHII>:G�8>I>:H�LDB:C�K>:L��=6C:A�6H�I=:�E6G6BDJCI�7G6C9�8=D>8:�6C9�L=:G:6H�B:C�K>:L�":GBSH�6H� I=:>G�H><C6IJG:�EG:;:G:C8:��->B>A6GAN�>C�H:8DC9�6C9�I=>G9I>:G�8>I>:H�&DJ>H�0J>IIDC�76<H�6G:�I=:�;>GHI�8=D>8:�6H�AJMJGN�<DD9H�

Troubles(with(expanding(consumer(trust

�AI=DJ<=� I=:�9:B6C9� ;DG� AJMJGN�EGD9J8IH�>H�GD7JHI� >C�H:8DC9�6C9� I=>G9I>:G�8>I>:H�I=:G:�>H�CDI�:CDJ<=�IGJHI�>C�AD86A�AJMJGN�HIDG:H���AI=DJ<=�>C�8:GI6>C�H:8DC9�6C9�I=>G9I>:G�8>I>:H�AJMJGN�>I:BH�6G:�>C�HNC8�L>I=�;>GHII>:G�8>I>:H�DG�:K:C�<AD76AAN�8DCHJB:GH�6G:�HI>AA�BDG:�L>AA>C<�ID�H=DE�>C�;>GHII>:G�8>I>:H�

Troubles(with(enhancing(brand(impact

#C�� ��� >CI:GC6I>DC6A� AJMJGN�7G6C9H�=6K:�HJ88:HH;JAAN�=:A9�:K:CIH�DC:�6;I:G�6CDI=:G�.=:�<D6A� >H�D7K>DJH� I=6I� >H� ID�8DBBJC>86I:� I=:�7G6C9� ID�6AA��=>C:H:�8DCHJB:GH���:HE>I:� I=:� ;68I� I=6I�7G6C9H�8DB>C<� >CID��=>C6�6AA�=6K:�6�9::E�>CI:GC6I>DC6A� >C;AJ:C8:� I=:G:� >H� HI>AA� CD�7G6C9� I=6I�=6H� G:6A>O:9�EDEJA6G� 6C9�L>9:HEG:69�>C;AJ:C8:�>C��=>C6���G6C9�EGDBDI>DC6A�68I>K>I>:H� >C� ;>GHII>:G�8>I>:H�86C�DCAN�7:�D;�AD86A�>C;AJ:C8:��#I�86CCDI�68IJ6AAN�>C;AJ:C8:�I=:�I=>C@>C<�6C9�8DC8:EIH�D;�8DCHJB:GH�>C�H:8DC9�6C9�I=>G9I>:G�8>I>:H�

Page 31: Fortune Character China Luxury Report 2012

028�"#(��&/2/,3�,�*),.

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Troubles(with(strengthening(sales(channel

#C� I:GBH�D;�H6A:H�8=6CC:A� I=:�7JH>C:HH�:CK>GDCB:CI� >H�CDI�<G:6I� >C�H:8DC9�6C9�I=>G9I>:G�8>I>:H�=6K:�N:I� ID� ;DGB�6�7JH>C:HH�8AJHI:G�6C9�G:6HDC67A:�8DCHJBEI>DC�:CK>GDCB:CI��1:�9>H8DK:G:9� I=6I�7G6C9H� >C� H:8DC9�6C9� I=>G9I>:G� 8>I>:H�=6K:�9:K:ADE:9�XI=:�>HDA6I:9�>HA6C9�:;;:8I���.=:�67H:CI�D;�6�8DCHJBEI>DC�6IBDHE=:G:�L>AA�EJH=�AD86A�8DCHJB:GH�ID�;ADL�ID�;>GHII>:G�8>I>:H�!!!!!!!!Troubles(with(maintaining(brand(service

-6A:H�8=6CC:AH�=6K:�:ME6C9:9� ID� H:8DC9�6C9� I=>G9I>:G� 8>I>:H�7JI� H:GK>8:�8=6CC:AH�6C9�HJEEDGI>C<�H:GK>8:H�6G:� >CHJ;;>8>:CI�� >GHIAN� I=>H� >H�9J:� ID�8DHI�8DCH>9:G6I>DC� 8DCHI6CI�:ME6CH>DC�D;�EGD;:HH>DC6A� H:GK>8:H� ID�EGD;:HH>DC6A�H:GK>8:� :C9ED>CIH� >H� IDD� :ME:CH>K:��-:8DC9AN� EGD;:HH>DC6A� H:GK>8:H� 6G:�>CHJ;;>8>:CI��.=:� AJMJGN�B6G@:I� >H� 9:K:ADE>C<� IDD� ;6HI� 6C9� A:69H� ID� I6A:CI�H86G8>IN�6�A68@�D;�EGD;:HH>DC6A�H:GK>8:�E:GHDCC:A��.=>G9AN�AJMJGN�7G6C9H�JI>A>O:�6�B6G@:I� HIG6I:<N� ID� 8DCIGDA� I=:�6BDJCI�D;�EGD9J8I� >C� I=:�B6G@:I�B6@>C<�>I� 9>;;>8JAI� ;DG� H:GK>8:H��.=:N�9DC[I�EJI� X8JHIDB:GH�H6I>H;68I>DCY�6H� I=:>G� IDE�EG>DG>IN���JHIDB>O:9�H:GK>8:H�B6N�9D�7:II:G�>C�H6I>H;N>C<�8DCHJB:GH�

Troubles(with(reinforcing(communication(channels

-:8DC9�6C9� I=>G9I>:G� 8>I>:H�6G:� A68@>C<�B6G@:I>C<�B:9>6�8=6CC:AH�6AI=DJ<=�I=:N�=6K:�EGDBDI>DCH�6C9�:K:CIH�7JI� I=:� >C;AJ:C8:� >H� A>B>I:9� 6AA� I=:�7:HI�7G6C9H[�8DBBJC>86I>DC�8=6CC:AH�6G:�69K:GI>H:B:CIH�EAJH�68I>K>I>:H��':9>6�L>I=�I=:� A6G<:HI�8>G8JA6I>DC� >C� ;>GHII>:G�8>I>:H�9D�CDI� >C;AJ:C8:�G:69:GH� >C�H:8DC9�6C9�I=>G9I>:G�8>I>:H�7JI�I=:G:�>H�CD�DI=:G�8=D>8:�L=:C�7G6C9H�:CI:G�I=:�H:8DC9�6C9�I=>G9I>:G�B6G@:I�� #C69:FJ6I:� HJEEDGIH�D;�=><=FJ6A>IN�B:9>6� G:HDJG8:H�6C9�8DBBJC>86I>DC�8=6CC:AH�=6K:�A>B>I:9�I=:�:ME6CH>DC�D;�B6HH�8DK:G6<:�D;�7G6C9�>C;DGB6I>DC�6C9�7G6C9�>C;AJ:C8:�

Page 32: Fortune Character China Luxury Report 2012

029 �"#(��&/2/,3�,�*),.

�"�*.�,�.1)

Page 33: Fortune Character China Luxury Report 2012

030�"#(��&/2/,3�,�*),.

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Chapter ThreeLuxury Lifestyle in China

Page 34: Fortune Character China Luxury Report 2012

031 �"#(��&/2/,3�,�*),.

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Female25.4%

Male74.6%

18% Above+55

45.55+yo

35.45+yo

20.35+yo

35%

40%

7%

0.08+Million

1.4+Million

with+assets+over+100+million+RMB

with+assets+over+10+million+RMB

High+net+worth+individuals+with+assets+over+100+million+RMB+are+over+0.08+million+

High+net+worth+individuals+with+assets+over+10+million+RMB+have+reached+1.4+million

Section(One:(Characteristics(of(the(wealthy(population(in(China

The(wealthy(Chinese(population(are(creating(positive(impacts

�HH:HH>C<�76H:9�DC� I=:�96I6�<6I=:G:9�7N� ��6H�D;�)8ID7:G�� ���L:6AI=N!EDEJA6I>DC�L>I=�6HH:IH�DK:G�,'��� �B>AA>DC�=6K:� G:68=:9�����B>AA>DC�L=>A:�G>8=�EDEJA6I>DC�L>I=�6HH:IH�DK:G�,'��� �B>AA>DC�=6K:�G:68=:9�� �

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE

1:6AI=N�8DCHJB:GH�G:;:G�ID�=><=�6HH:I�<GDJEH�L>I=�C:I�6HH:IH�DK:G�� �B>AA>DC�,'�

�M=>7>I����'6>C��=6G68I:G>HI>8H�D;��=>C:H:�1:6AI=N

China(Has(a(Wealthy(Population(of(1.4(Million( Wealthy(Population(in(China(are(

Younger,(Primarily(35(to(45(Years(Old

MaleVDominated

Page 35: Fortune Character China Luxury Report 2012

032�"#(��&/2/,3�,�*),.

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Dominated(by(males

.=:��=>C:H:�L:6AI=N�EDEJA6I>DC� >H� HI>AA� A6G<:AN�B6A:9DB>C6I:9�6I�������L>I=�L:6AI=N�LDB:C�6I���������H�6HH:I�H>O:�<GDLH�I=:�E:G8:CI6<:�D;�B6A:H�6AHD�>C8G:6H:H�

Relatively(younger(in(age

�=>C:H:�L:6AI=N�:B:G<>C<�6;I:G� I=:� G:;DGB�6G:�<:C:G6AAN� NDJC<:G� >C�6<:�8DBE6G:9� ID� I=:>G� ;DG:><C�8DJCI:GE6GIH�:HE:8>6AAN�H>C8:� I=:�9:K:ADEB:CI�D;�I=:� >CI:GC:I�6C9�\C6C8:� >C9JHIGN������N:6GH�DA9��=>C:H:�L:6AI=N�B6@:�JE�� ��D;�I=:�IDI6A�6;]J:CI�EDEJA6I>DC�

“Family(fortune”(trait

�J:�ID�I=:�JC>FJ:��=>C:H:�=>HIDG>86A�768@<GDJC9��=>C:H:�L:6AI=N�EDEJA6I>DC�=6K:�6�I:C9:C8N�D;�;6B>AN�;DGIJC:�IG6>I�;DGB>C<�6�X1:6AI=N�;6B>AN�8A6CY�L=>8=�9>HI>C8I� I=:BH:AK:H� ;GDB�DI=:G�<GDJEH� I=6I� >H� I=:�:6GAN� ;DGB�D;� I=:��=>C:H:�JEE:G8A6HH�

Bucking(the(geographical(concentration

->C8:��=>C6[H� G:;DGB�6C9�DE:C>C<JE�9:K:ADEB:CI�D;� G:<>DC6A�:8DCDB>8H�6AHD�=6EE:CH� ID�7:� I=:�9>HIG>7JI>DC�B6E�D;� I=:�EDEJA6I>DC�D;� I=:��=>C:H:�L:6AI=N��.=:�BDG:�:8DCDB>86AAN� 9:K:ADE:9�:6HI��=>C6� HDJI=��=>C6�6C9�CDGI=��=>C6�=6K:�7:8DB:� I=:�BDHI� 8DC8:CIG6I:9� G:<>DCH�D;� I=:��=>C:H:�L:6AI=N�B6>CAN� >C�$>6C<HJ�4=:?>6C<�-=6C<=6>��:>?>C<�.>6C?>C�.6C<H=6C�6C9�I=:�*:6GA�,>K:G��:AI6�G:<>DC�

�JI�I=>H�E6II:GC�>H�7:>C<�7GD@:C�DC:�IG:C9�>H�I=6I��=>C:H:�L:6AI=N�6G:�H=>;I>C<�ID�H:8DC9�6C9� I=>G9I>:G� 8>I>:H�6�CJB7:G�D;�:B:G<>C<�7JI� ADL@:N�L:6AI=N�EDEJA6I>DC�6G:� G>H>C<� >C�H:8DC9�6C9� I=>G9I>:G� 8>I>:H�L>I=�HIGDC<�EJG8=6H>C<�EDL:G�6C9� AJMJGN�8DCHJBEI>DC�9:H>G:H�� JGI=:GBDG:�6CDI=:G� IG:C9� >H� I=:�DJI]DL�D;��=>C:H:�;DGIJC:�>BE:IJH�;DG�DK:GH:6H�>CK:HIB:CI�>H�HIGDC<:G�I=6C�:K:G���88DG9>C<�ID�I=:�G:H:6G8=�B69:�7N� ������D;��=>C:H:�7>AA>DC6>G:H�=DA9�DK:GH:6H�6HH:IH�DG�=6K:� ;6B>AN�B:B7:GH�=DA9>C<� ;DG:><C�E6HHEDGIH�����D;�E:DEA:�L>I=�DK:G�� �B>AA>DC�6HH:IH�=6K:�DK:GH:6H�6HH:IH�DG� ;6B>AN�B:B7:GH�L>I=�;DG:><C�E6HHEDGIH�

Page 36: Fortune Character China Luxury Report 2012

033 �"#(��&/2/,3�,�*),.

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67%

14%

67%$of$Chinese$billion/aires$own$overseas$assets$or$have$family$members$holding$foreign$passports$

14%$of$Chinese$wealthy$own$assets$overseas$or$have$family$members$holding$foreign$passports

Priority(given(to(personal(consumption,(with(more(focus(on(lifestyle(quality

�88DG9>C<� ID� ��G:H:6G8=�6K:G6<:�6CCJ6A�HE:C9>C<��:M8AJ9>C<�G:6A�:HI6I:��D;�B>AA>DC6>G:H�L>I=�6HH:IH�DK:G�,'��� �B>AA>DC�G:68=:H�,'�������B>AA>DC���I�I=:�H6B:�I>B:�6K:G6<:�6CCJ6A�HE:C9>C<��6H>9:� ;GDB�G:6A�:HI6I:��D;�7>AA>DC6>G:H�6G:�,'�������B>AA>DC�� GDB�6�E:GHDC6A�8DCHJBEI>DC�E:GHE:8I>K:�I=:>G�7J9<:I�B6>CAN�<D:H�ID�AJMJGN�8DCHJBEI>DC�688DJCI>C<�����D;�I=:�A>K>C<�:ME:C9>IJG:H�

.=:��=>C:H:�L:6AI=N�6G:�L>AA>C<� ID� >CK:HI� >C� I=:�:9J86I>DC�D;� I=:>G�8=>A9G:C��-:C9>C<� I=:>G� @>9H� ID� G:CDLC:9� H8=DDAH� 67GD69� =6H� 7:8DB:� I=:� CDGB�I=JH� >C8G:6H>C<� I=:�DEEDGIJC>IN� ID�7JN� G:6A� :HI6I:�6C9� >CK:HI� >C�EGD?:8IH��.=:��=>C:H:�L:6AI=N�L=D�H:C9� I=:>G� 8=>A9G:C� ID�HIJ9N�67GD69�=6H�6AG:69N�G:68=:9� >IH� E:6@� L>I=� HDB:��=>C:H:� 8DCI:BEA6I>C<� I=:� C:8:HH>IN� D;�DK:GH:6H�:9J86I>DC�� #C� I=:�8DB>C<�N:6GH� I=:�JEHJG<:� >C�HIJ9N�67GD69�L>AA�HI6GI�ID�HADL�9DLC�6C9�9:K:ADE�6I�6�HI:69N�E68:�

JGI=:GBDG:� I=:��=>C:H:�L:6AI=N� =6K:� 7::C� >C8G:6H>C<AN� >CI:G:HI:9� >C�K686I>DC>C<�6C9� G:8G:6I>DCH� >C� G:8:CI� N:6GH� 7DI=� I>B:�6C9�BDC:N� HE:CI�DC� E:GHDC6A� 8DCHJBEI>DC� 6G:� >C8G:6H>C<� 8G:6I>C<� =><=:C9� IDJG>HB�8DCHJBEI>DC�6C9� 8JAIJG6A� :ME:G>:CI>6A� 8DCHJBEI>DC� >C9JHIGN���H�E:GHDC6A�6HH:IH�<GDL�6C9� I=:�C::9H�9:G>K:9� ;GDB�6� HI67A:�9:K:ADEB:CI� D;� ;6B>AN�7JH>C:HH:H� I=:��=>C:H:�L:6AI=N� >H� HI6GI>C<� ID�EA68:�BDG:� >BEDGI6C8:�DC�=:6AI=� 6C9� ;>IC:HH��"><=:C9� A:>HJG:� HEDGIH� 6C9� E:GHDC6A� K>GIJ:� IG6>C>C<�LDJA9�7:�I=:�B6>CHIG:6B�D;�I=:>G�;JIJG:�8DCHJBEI>DC�

Outflow(of(Chinese(Fortune

�6I6�-DJG8:�� DGIJC:��=6G68I:G�!GDJE

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Page 37: Fortune Character China Luxury Report 2012

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Luxury&Consumption

VacationChildren’s&Education

Healthcare Other

35%

30%

25%

20%

15%

10%

5%

0%

35%

26%

18% 17%

4%

Luxury&Consumption

Children’s&Education&&&&&&Healthcare

Vacation

Other

�M=>7>I����'6>C��DCHJBEI>DC�*6I=�D;��=>C:H:�1:6AI=N

�6I6�-DJG8:�� DGIJC:��=6G68I:G�!GDJE

Consumption(of(the(Wealthy(Chinese(Population(are(Mainly(

on(Luxury(Goods(and(Children’s(Education

�M=>7>I����'6>C�,:6HDCH�;DG�)K:GH:6H�,:6A��HI6I:�*JG8=6H:H�D;��=>C:H:�1:6AI=N

�6I6�-DJG8:�� DGIJC:��=6G68I:G�!GDJE

Whether(Rich(Chinese(are(Considering(

Buying(Real(Estates(Overseas

Their(Major(Reasons(for(Buying(Real(Estates(

Overseas(are(Children's(Education

Undetermined

21%

Not+Considering

12%

Considering

67%

Vacation

20%

Investment

15%

Immigration

12%

Other

2%

Children’s+Education

51%

Page 38: Fortune Character China Luxury Report 2012

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IncreaseFlatUncertainDecrease

Over0100million

Unit0RMB

50090100million

1009050million

Less0than010million

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

43% 25% 29% 3%

38% 23% 23% 16%

32% 20% 18% 30%

23% 19% 21% 37%

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luxury(products,(future(demand(remains(inelastic

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The(Richer(the(Consumer(is,

the(Firmer(the(Demand(for(Luxury(Consumption(Becomes

Page 39: Fortune Character China Luxury Report 2012

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Page 40: Fortune Character China Luxury Report 2012

037 �"#(��&/2/,3�,�*),.

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RMB$10$Million RMB$50$Million Individual$Assets

Willingness$to$Spend

Male

GeneralFemale

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have(strong(consumption(desires

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Page 41: Fortune Character China Luxury Report 2012

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35%

40%

30%

25%

20%15%

10%5%0%

20%()(50%

10%()(20%

Below10%

Above50%

25%

33%

38%

4%

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Over(Half(of(Consumers(Spend(Less(Than(20%(

Annual(Spending(on(Luxury(Goods

The(Less(Assets(the(Consumer(Owns,(the(

Much(He(Spends(on(Luxury(Goods

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Below&10%

10%&*&20%20%&*&50%

Above&50%

Over&100M

Unit&RMB

50&*&100M

10&*&50M

Less&than&10M

0% 20% 40% 60% 80% 100%

24% 45% 25% 6%

23% 43% 29% 5%

22% 42% 33% 3%

25% 37% 36% 2%

Page 42: Fortune Character China Luxury Report 2012

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3.(Luxury(consumption(are(becoming(popular(with(participation(

of(mass(consumers

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The(Most(Expensive(Luxury(Goods(Purchased(by(Chinese(are(Mainly(

Less(Than(0.5(Million(RMB

Top(3(Categories(are:(Watches,(Cars(,(Bags&Luggages

53%

19%

16%

7%

3%

2%

Less$than0.5M

Unit$RMB

0.5$1$1M

1$1$2M

2$1$5M

5$1$10M

More$than10M

Artworks12%

Jets1% Yachts

1%

Handbags16%

Jewelries13% Luxury

Watches$35%

LuxuryCars22%

Page 43: Fortune Character China Luxury Report 2012

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Top(3(Categories(of(the(Most(Expensive(Luxury(Goods(Purchased(by(HighV

Asset(Class(Consumers(are:(Luxury(Cars,Luxury(Watches(and(Artworks

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4.(Luxury(consumption(deflected(abroad,(primary(composed(by(

future(cultural(experience(and(overseas(brand(sales

,:<6G9>C<�8DCHJBEI>DC�67GD69�;DG� AJMJGN�EGD9J8IH�B6CN�>CHI>IJI>DCH�6<G::�I=6I�EG>8>C<�9>;;:G:C8:� >H�L=6I[H�86JH>C<�8DCHJBEI>DC�DJI;ADL��.=:� IG:C9�D;�AJMJGN�8DCHJBEI>DC�DK:GH:6H� >C�� ���=6H�9>;;:G:CI� G:6HDCH� ;DG�8DCHJB:GH�L>I=�9>;;:G:CI�6HH:I�8A6HH:H��.=:�6K:G6<:�8DCHJB:G�>H�BDG:�EG>8:�H:CH>I>K:�=6K:�6C�6II>IJ9:�D;�XI=:�BDG:�NDJ�7JN�I=:�BDG:�K6AJ:�NDJ�<:IY�6C9�L:6AI=N�8DCHJB:GH� I:C9� ID� ;D8JH�BDG:�DC� I=:�H=DEE>C<�:ME:G>:C8:�6C9�FJ6A>IN�D;�H:GK>8:�L>I=�B6CN�L:6AI=N�8DCHJB:GH�:MEG:HH>C<� I=:�H:GK>8:�FJ6A>IN�6G:�;6AA>C<�H=DGI�>C�9DB:HI>8�B6AAH�

Artworks

Handbags

Jewelry&Accessories

LuxuryWatches

LuxuryCars

Yachts

PrivateJets

10%

8%23%

35%

9%6%

8%19%

15%

31%38%

35%

38%11%

9%

3%

2%

Over?50?million?RMB10?G?50?million?RMBLess?than?10?million?RMB

Page 44: Fortune Character China Luxury Report 2012

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Cheaper'thanmainland'China

Sales'through'tour'guide

Quality'guarenteed

Wider'range'of'style

Souvenir'from'business'tripor'traveling

Long:term'living'abroad 15%

8%

6%

19%

17%

3%

32%2%

5%

17%

35%

21%

20%

Average'Consumers Wealthy'Consumers

For'the'personalized'service'&experience

1)(With( the(shift( from(mainland(China( to(overseas,( the(“1+1+1”rule(of(

luxury(consumption(is(being(broken

,:H:6G8=� G:HJAIH� ;GDB� I=:�� ����=>C6�&JMJGN�,:EDGI� H=DL:9� I=6I��=>C:H:�AJMJGN� 8DCHJB:GH� 9>HEA6N:9� 6X�����YG:<>DC6A� GJA:� L=:C� 7JN>C<� AJMJGN�EGD9J8IH�L=>8=�B:6CH�6� I=>G9� D;� HE:C9>C<�D88JGG:9� >C�B6>CA6C9��=>C6� 6�I=>G9�8DBEA:I:9�DK:GH:6H�6C9�6CDI=:G� I=>G9� ;GDB�'686J�6C9�"DC<�%DC<���JI�G:HJAIH�;GDB�� ���G:K:6A:9�I=>H�GJA:�=6H�7::C�7GD@:C�L>I=��=>C:H:�8DCHJB:GH�B6@>C<�HE:C9>C<�9:8>H>DCH�<G6K>I6I>C<�DK:GH:6H�6H>9:�;GDB�'686J�6C9�"DC<�%DC<�������JGDE:� >H� I=:�B6>C� HE:C9>C<�9:HI>C6I>DC� ;DG��=>C:H:�DK:GH:6H�8DCHJB:GH�6I����;DAADL:9�7N�I=:�/-�� ��L>I=�$6E6C�;6AA>C<�ID����

39%(of(Consumers(Who(Bought(Luxury(

Goods(Overseas(in(the(Past(12(Months

Shanghai(is(the(Preferred(Mainland

City(for(Chinese(Luxury(Consumers

�M=>7>I�����1=:G:��>9�3DJ�'6@:�&JMJGN�*JG8=6H:H�

�6I6�-DJG8:�� DGIJC:��=6G68I:G�!GDJE

�M=>7>I��� �,:6HDCH�;DG��=>C:H:��DCHJB:GH[�&JMJGN�-=DEE>C<�)K:GH:6H

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE

1:6AI=N�8DCHJB:GH�G:;:G�ID�=><=�6HH:I�<GDJEH�L>I=�C:I�6HH:IH�DK:G�� �B>AA>DC�,'�

49%

Page 45: Fortune Character China Luxury Report 2012

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2)(Chinese(consumers(prefer(overseas(spending(of(luxury(products(in(

brand(stores(and(DFS

!:C:G6AAN� HE:6@>C<�9DB:HI>8�B6AAH�DK:GH:6H�HIDG:;GDCIH�6C9�� -�6G:� I=:�IDE� AD86I>DCH�L=:G:��=>C:H:� 8DCHJB:GH� A>@:� ID�EJG8=6H:� AJMJGN�EGD9J8IH�7JI�B6HH�8DCHJB:GH�6G:� H:CH>I>K:� ID�EG>8:H� HD� I=:N� I:C9� ID� H=DE�6I�� -�������;DAADL:9�7N�DK:GH:6H�HIDG:;GDCI�L=>A:�IG6K:A>C<�������6C9�I=:�I=>G9�>H�9DB:HI>8�B6AAH� ���������HB6AA�6BDJCI�D;� 8DCHJB:GH�EG:;:G�7JN>C<� I=GDJ<=�EGD;:HH>DC6A�6<:CIH� �� ���6C9�7JN>C<� AJMJGN�EGD9J8IH�DCA>C:� ������1=:C�6�AD86A�8DCHJB:GH[�6HH:I� >H�L>I=>C�,'��� �W�� �B>AA>DC� I=:N�I:C9�ID�8=DDH:�>C�I=:�DG9:G�D;�� -�������DK:GH:6H�HIDG:;GDCIH��� ���6C9�9DB:HI>8�B6AAH�������

1=:C� I=:�L:6AI=N�EDEJA6I>DC�L>I=�E:GHDC6A� 6HH:IH�DK:G�,'��� �B>AA>DC�DG� I=:� HJE:G� G>8=�L>I=� DK:G� 6� 7>AA>DC� >C� 6HH:IH� I=:>G� DK:GH:6H� HIDG:;GDCI�EJG8=6H:H�6G:�6H�=><=�6H����� ;DAADL:9�7N�� -� ������:K:CI�6C9�:MEDH�������6C9�9DB:HI>8�B6AAH�EJG8=6H:H�;6AAH�ID����

Higher(Asset(Groups(Have(a(Higher(Tendency(of(Buying(Luxury(

Goods(Overseas

�M=>7>I�����*6I=L6NH�;DG��DCHJB:GH�L>I=��>;;:G:CI��HH:IH�ID��JN�&JMJGN�!DD9H

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Mainland'ChinaHong'Kong'&'MacauOther

Less'than'10'millionRMB

10'<'50'millionRMB

50'<'100'millionRMB

Over'100'millionRMB

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

27% 26% 47%

31% 24% 45%

40% 28% 32%

44% 25% 31%

Page 46: Fortune Character China Luxury Report 2012

043 �"#(��&/2/,3�,�*),.

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3)(Leather(goods,(watches(and(jewelry(from(luxury(brands(are(primary(

targets(for(Chinese(consumers

1=:C� 7JN>C<� AJMJGN� EGD9J8IH� 67GD69��=>C:H:� 8DCHJB:GH� I:C9� ID� 7JN�A:6I=:G�EGD9J8IH�L6I8=:H�6C9�?:L:AGN���J:�ID�9>;;:G:CI�6HH:I�A:K:AH�6K:G6<:�8DCHJB:GH�I:C9�ID�7JN�76H>8�AJMJGN�EGD9J8IH�HJ8=�6H�E:G;JB:�6C9�8DHB:I>8H�A:6I=:G�EGD9J8IH�6C9�8ADI=>C<�L=>A:�EG:B>:G�AJMJGN�EGD9J8IH�HJ8=�6H�L6I8=:H�6C9� ?:L:AGN�6G:� ;6KDG:9�6BDC<�L:6AI=N�8DCHJB:GH�� #CI:G:HI>C<AN�9J:� ID� I=:�EG>8>C<�<6E�7:IL::C�=DB:�6C9�67GD69�6K:G6<:�8JHIDB:GH�A>@:�ID�7JN�A:6I=:G�EGD9J8IH�DK:GH:6H�:HE:8>6AAN�7><C6B:�=6C976<H��1:6AI=N�8DCHJB:GH�6AHD�7JN�A:6I=:G�EGD9J8IH�67GD69�7JI�6G:�BDG:�:C6BDG:9�L>I=� A>B>I:9�:9>I>DCH�DG�8JHIDB>O:9�A:6I=:G�<DD9H�

Average(Asset(Class(Consumers(are(PriceVSensitive(and(Prefer(to(Buy(

Luxury(Goods(at(DFS

High(Asset(Class(Consumers(Purchase(Top(and(Rare(Goods(in(

Overseas(Stores

�M=>7>I������=6CC:AH�D;��JN>C<�&JMJGN�!DD9H�;DG��DCHJB:GH�L>I=��>;;:G:CI��HH:IH

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Mainland'Malls

OverseaStorefronts

Duty'Free'Shops

ProfessionalAgencies

Events'&'Expos

Online

Other

Over'50'million'RMB10'D'50'million'RMBLess'than'million'RMB

9%

38%30%

26%

11%16%

32%36%

31%

4%5%

11%

10%

10%7%

4%7%

8%

1%2%

2%

Page 47: Fortune Character China Luxury Report 2012

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4)(Luxury(consumption(deflected(to(overseas(will(soon(abate

�=>C:H:�8DCHJB:GH� I=6I�HE:C9�DC� AJMJGN�EGD9J8IH�DK:GH:6H�6G:�8A6HH>;>:9�>CID�ILD�HI6<:H��I=:�;>GHI�HI6<:�>H�:6GAN�96NH�D;�G:;DGB�ID�I=:�B>9���� H�L>I=�DK:G�� ��D;�AJMJGN�8DCHJBEI>DC�688DBEA>H=:9�I=GDJ<=�<D>C<�67GD69��'6>CAN�9J:�ID�I=:�:B7GNDC>8�HI6<:�D;�I=:�AJMJGN�B6G@:I�6C9�;:L�>CI:GC6I>DC6A�AJMJGN�7G6C9H�=6K:�HI6I>DC:9� I=:BH:AK:H� >C� I=:��=>C:H:�B6G@:I� AJMJGN�EGD9J8IH�L:G:� 8DC8:CIG6I:9� >C�B6AAH� 6C9� ;>K:HI6G� =DI:AH�L>I=� A>B>I:9� H:A:8I>DC�D;�AJMJGN�EGD9J8IH�DK:GH:6H�8DCHJBEI>DC�L6H�I=:�B6>C�HIG:6B�L6N�;DG�AJMJGN�8DCHJBEI>DC�

.=:� H:8DC9� HI6<:�L6H� I=:�B>9� ��� H� ID� EG:H:CI� I=:� G6I>D� D;� AJMJGN�8DCHJBEI>DC�67GD69�=6H�7::C�9:8G:6H>C<�� #C� I=>H�:G6� I=:��=>C:H:� AJMJGN�B6G@:I� >H�9:KADE>C<�FJ>8@AN� 6C9� AJMJGN�7G6C9H�6G:�HIG:6B>C<� >CID��=>C6���H>9:�;GDB�DE:C>C<�HIDG:H�>C�;>GHII>:G�8>I>:H�D;��:>?>C<�-=6C<=6>�!J6C<O=DJ�6C9�-=:CO=:C�9>HIG>7JI>DC� 8=6CC:A� 8DK:G6<:�=6K:�6AHD�7::C�:ME6C9>C<�>CID�H:8DC9�6C9� I=>G9I>:G�8>I>:H�B6@>C<� >I�:6HN� ;DG�9DB:HI>8�8DCHJB:GH� ID�EJG8=6H:� AJMJGN�EGD9J8IH�8ADH:� ID�=DB:��&JMJGN�8DCHJBEI>DC�67GD69�=6H�7::C�9:8G:6H>C<�HIG:69>AN�6I� I=>H�HI6<:�� �� G:H:6G8=� G:HJAIH�H=DL� I=6I� I=:�8JGG:CI�DK:GH:6H� AJMJGN�HE:C9>C<� >H�B6>CI6>C:9�6I�6GDJC9�� �� �L=>8=� >H�8DCH>HI:CI�L>I=� I=:� G>H>C<�9DB:HI>8�DJI7DJC9� IDJG>HB� IG:C9� I=:�E:G8:CI6<:�D;�;JIJG:�DK:GH:6H�HE:C9>C<�L>AA�9:8A>C:�ID�� ��

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5%

27%

20%

16%

21%

11%Perfumes(&Cosmetics(

Leather(Goods

Clothing

Watches

Jewelry

Others 2%

1%

7%

32%

30%

28%

Average(Consumers Wealthy(Consumers

Page 48: Fortune Character China Luxury Report 2012

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11.3%

18.6%

11.9%

4.0%

20.4%

22.0%

9.6%

0%

5%

10%

15%

20%

25%

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2006 2007 2008 2009 2010 2011 2012

3452.36

4095.44584.44 4765.63

5738.65

77007025

Outbound(Chinese(Visitors(Increase(Every(Year(and(Booming(of(Tourism

�M=>7>I�����*DEJA6I>DC�.G:C9�D;��=>C:H:�)JI7DJC9�0>H>IDGH

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�JI�L>I=� I=:� =><=� HE::9� 9:K:ADEB:CI� D;� AD<>HI>8H� 6C9� >C;DGB6I>DC� ;ADL�6C9� I=:� >CI:<G6I>DC�D;� I=:�<AD76A�:8DCDBN�DK:GH:6H�HE:C9>C<�L>AA� A:HH:C��=>C:H:�8DCHJB:GH�LDJA9�<D�67GD69�ID�EJG8=6H:�AJMJGN�<DD9H�I=6I�6G:�CDI�6K6>A67A:� >C��=>C6���JHIDB>O:9� A>B>I:9�:9>I>DCH�6C9�C>8=:�9:H><C:G�7G6C9H�L>AA�<6>C�EDEJA6G>IN�6BDC<�9DB:HI>8�8DCHJB:GH�

Tourism(and(cultural( experiential( purchasing(will( become( the(main(

trend(for(future(overseas(luxury(consumption

1>I=�I=:�7DDB>C<�D;�IG6K:AA>C<�67GD69���=>C:H:�8DCHJB:GH�6G:�L>AA>C<�ID�K>H>I�I=:�7>GI=EA68:�D;�AJMJGN�7G6C9�6C9�H6KDG�I=:�7G6C9�=:G>I6<:�9JG>C<�I=:�IG>E�

Page 49: Fortune Character China Luxury Report 2012

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No#logo

Less#logo

Serious#with

logo

Love#for#logo

Eager#for#logo

Don’tunderstand

logo

Billionaires#and#cultured#individualsUsually#over#45#in#ageFocus#on#consumption#quality,#like#to#collect#and#invest,especially#in#artwork

Focus#on#individuality#and#high#quality#service,Mainly#assets#at#around#billionsHave#inGdepth#knowledge#of#brands,#like#limitededitions#and#customized#products#

Mostly#"60s#and#70s#generation"#millionaires#Value#brand#recognitionHave#inGdepth#knowledge#of#luxury#productsLike#to#attend#social#events#and#networkSpend#a#lot#on#luxury#gifts

White#collars#around#25G30Buy#secondGline#luxury#products#or#fashion#brands,#love#logosLike#to#shop#onlineDesire#to#be#approvedPursue#fashion#and#luxury

Mainly#under#25,#low#spending#powerBrand#conscious#and#tend#to#follow#trendsLike#to#shop#onlineBuy#knockGoffs

Low#income,#priceGsensitveDon't#care#about#brands,#focus#on#product#functions#

5.Maturating(of( tastes( for( luxury(brands:( from(purchasing( to(

fulfill(other's(needs(to(prioritize(personal(needsZ(from(following(

others(to(generating(individual(needs(for(luxury(purchasing

Do(you(love(logo?

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Main(channel(of(overseas(luxury(consumption(will(be(through(overseas(

manufacturers

�JGG:CIAN� DK:GH:6H�HIDG:;GDCIH�6C9�� -�6G:� I=:�B6>C� K:CJ:H� ;DG�7JN>C<�AJMJGN�EGD9J8IH�DK:GH:6H��#C�I=:�;JIJG:�I=>H�IG:C9�L>AA�7:�G:EA68:9�7N�7JN>C<�I=GDJ<=�DK:GH:6H�B6CJ;68IJG:GH�L=>8=�L>AA�7G>C<��=>C:H:�8DCHJB:GH�=><=FJ6A>IN�:ME:G>:C8:H�

Page 50: Fortune Character China Luxury Report 2012

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Rich%and%know%how%to%live 3%2%

Rich%and%tasteful 3%2%

Poor%but%pretendsto%have%class 6%10%

Rich,%but%don't%knowhow%to%live,content 5%6%

Rich,%but%classless 48%46%

Rich,%don't%know%howto%live,but%learning%how%to 27%24%

Rich,%tasteless%but%content 8%10%

1)(Shifting(from(purchasing(to(meet(other(purchases(to(purchasing(for(

private(usage

�=>C6[H� AJMJGN�8DCHJB:GH�86C�7:�8A6HH>;>:9� >CID� ILD�B6>C�86I:<DG>:H�� I=:�;>GHI�<GDJE�9:E>8IH�I=DH:�L=D�HE:C9�;DG�HD8>6A�HI6IJH�6C9�6�9>HEA6N�D;�;DGIJC:�6H�I=:H:�8DCHJB:GH�86G:�BDG:�67DJI�XL=6I�DI=:GH�H::Y��.=:�H:8DC9�<GDJE�:BE=6H>O:H�BDG:�DC� I=:�EGD9J8I� >IH:A;�L=:G:� I=:�EJG8=6H:�D;� 6�EGD9J8I�8DB:H�B:G:AN� ;GDB� E:GHDC6A� C::9H� DG� >CI:G:HI� 6C9� 86G:H�BDG:� 67DJI�X>C9>K>9J6A�;::A>C<Y�

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"DL:K:G��=>C:H:�8DCHJB:GH�=6K:�H::C�6�G>H:� >C� I=:�IG:C9�D;�HE:C9>C<�DC�AJMJGN�<DD9H�9J:� ID� XEG>K6I:�C::9HY�:HE:8>6AAN� I=DH:�L>I=�E:GHDC6A�6HH:IH�DK:G�6�7>AA>DC��.=:N[K:�:MEG:HH:9� I=:�C::9� ID�EJG8=6H:� AJMJGN�<DD9H� I=6I�LDJA9�B6I8=� I=:>G� E:GHDC6A>IN� DG� EG:;:G:C8:� G6I=:G� I=6C� I=:�:BE=6H>O>C<�

Media’s(View(over(Chinese(Luxury(Consumers’(Consumption

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Page 51: Fortune Character China Luxury Report 2012

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Status&Symbol Hobbies&&Interest

Improving&Quality&of&Life

Retain&and&Increase&Value

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30%

25%

20%

15%

10%

5%

0%

28%30%

16%22%

4%

Status&SymbolImproving&Quality&of&&LifeRetain&and&Increase&ValueHobbies&&&InterestOther

2)(From(following(consumption(trends(to(forming(individuality(in(consumption

�AI=DJ<=� I=:� �=>C:H:� AJMJGN� B6G@:I� =6H� 7::C� I=GDJ<=� � � N:6GH� D;�9:K:ADEB:CI� AJMJGN� 8DCHJB:GH�6G:�6AHD�B6IJG>C<�� GDB� I=:� >C>I>6A� HI6<:�L=:G:�7G6C9�AD<DH�L:G:�EGDB>C:CIAN�9>HEA6N:9�ID�H=DL�D;;�HD8>6A�HI6IJH�6C9�L:6AI=� ID�CDL�EJGHJ>C<�E:GHDC6A>O:9�EGD9J8IH���ADC<�L>I=� I=:�8DCHJBEI>DC�688JBJA6I>DC�D;� AJMJGN�EGD9J8IH� I=:�HNB7DAH�D;� 8A6HH� I=:N� G:EG:H:CI�6G:�A:HH:C>C<��3DJ�L>AA�CDI�7:�67A:� ID�9>;;:G:CI>6I:� I=:�9>;;:G:CI�HD8>6A�HI6IJH�D;�E:DEA:�L>I=�?JHI�DC:�AJMJGN�>I:B�6CNBDG:���I�I=:�H6B:�I>B:��=>C:H:�L:6AI=N�6G:�A:6GC>C<�6I�6�G6E>9�HE::9�D;�I6HI:;JA�6C9�FJ6A>IN�8DCHJBEI>DC��(DL�I=:N�6G:�BDG:� >CI:G:HI:9� >C�8DCK:N>C<� I=:>G� >C9>K>9J6A>I>:H�.=:�8DCK:G<:C8:�D;�AJMJGN�7G6C9H�L>AA�CD�ADC<:G�H6I>H;N�I=:>G�=><=:G�8DCHJBEI>DC�C::9H��":C8:��=>C:H:�L:6AI=N�L>AA�8=DDH:�EGD9J8IH�I=6I�HJ>I�I=:BH:AK:H�6C9�6G:�JC>FJ:�

Media(Thinks(the(Value(of(Luxury(Goods(to(Wealthy(Population(

is(Mainly(Statement(of(Status(and(Improvement(of(Life(Quality

�M=>7>I�����':9>6[H�0>:L�DK:G�I=:�&JMJGN�!DD9H[�06AJ:�ID��=>C:H:�1:6AI=N

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Page 52: Fortune Character China Luxury Report 2012

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The(Higher(the(Asset(Group,(The(Easier(to(Be(Influenced(by(Sales(

Personnel,(and(the(More(Enthusiastic(for(Limited(Editions(and(

Customized(Products

�M=>7>I�����'DI>K:H�;DG��DCHJB:GH�L>I=��>;;:G:CI��HH:IH�ID��DCHJB:�&JMJGN�!DD9H

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'DG:� >BEDGI6CIAN� BD9:GC� HD8>:IN� =6H� 9:K:ADE:9� ID� 6� 8DCHJB:GA:9�8DBB:G8>6A�HI6<:�L>I=�8DCHJB:GH[�DLC�E:GHDC6A>IN�6C9�HJ7HI6C8:� ID�<>K:�7G6C9H�BJAI>8DCCDI6I>DC��.=:�BDG:� =><=:C9� I=:� 8DCHJB:G� I=:� =><=:G�I=:� G:H>HI6C8:� ;DG� I=:�7G6C9�E:GHDC6A>IN� I=:�7G6C9� IDJIH�6C9� ;A6JCIH� 6C9�>CHI:69�:ME:8IH� I=:�7G6C9�E:GHDC6A>IN� ID�B6I8=� I=:>G� >C9>K>9J6A>IN��,:H:6G8=�H=DLH� I=6I�����D;�8DCHJB:GH�L>I=�6HH:IH� ADL:G� I=6C�,'��� �B>AA>DC�6C9�� ��L>I=�6HH:IH�7:IL::C�,'��� ��� �B>AA>DC�:MEG:HH:9�I=:�>BEDGI6C8:�D;�EGD9J8I�9:H><C�6C9�7>AA>DC6>G:H�6G:�BDG:�;>M:9�DC�A>B>I:9�:9>I>DC�������6C9�8JHIDB>O:9� �� ���EGD9J8IH�L=>8=� ID� HDB:�9:<G::�K:G>;>:H� I=:�8DCHJB:G�B:CI6A>IN�D;��=>C:H:�8DCHJB:GH�

/CA>@:�� ����=>C6�&JMJGN�,:EDGI�I=:�G:HJAIH�H=DL�I=6I�I=:�=><=:G�I=:�6HH:I�8GDL9�I=:�:6H>:G�ID�7:�>C;AJ:C8:9�7N�H6A:H�HI6;;�6I�����>AAJHIG6I>C<�I=6I�G>8=��=>C:H:�C::9�EGD;:HH>DC6A�<J>96C8:�6C9�8DCHJAI>C<�69K>8:�L=>8=�EA68:H�I=>H� >BEDGI6CI�G:HEDCH>7>A>IN�DC�H6A:H�HI6;;�G:HJAI>C<�>C�6�=><=:G�G:FJ>G:B:CI�;DG�H:GK>8:�FJ6A>IN�6C9�H:GK>8:�6II>IJ9:�D;�7G6C9�H6A:H�HI6;;�

48%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

(

Less(than(10(million(RMB(10(750(million(RMB(Over(50(million(RMB(

Product(design Limited(editionsSales(personnel Customized Discount Environment Friend’srecommendation

6%9% 9%

17%

8%3%

20%

32%

16%

8%

16%

5% 3%

17%

28%25%

20%

5% 3% 2%

Page 53: Fortune Character China Luxury Report 2012

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3)(Higher( demand( for( customizationZ(wider( range( for( customization(

offerings

�JHIDB>O6I>DC� IG:C9� >H� I=:� IG6CH;DGB>C<�D;� 8JHIDB:G� 7G6C9� ADN6AIN� ID� >IH�EGD9J8I� FJ6A>IN� I=:� JAI>B6I:�B6C>;:HI6I>DC� D;� EGD9J8I� FJ6A>IN� ADN6AIN� >H�E:GHDC6A>O:9�8JHIDB>O6I>DC��1=D:K:G� 86I:GH� ID� I=>H�B6G@:I� IG:C9�L>AA�L>C�B6G@:I�688:EI6C8:�6C9�;6HI�<GDLI=��.G69>I>DC6A��=>C:H:�8JAIJG:�=6H� A:9�I=:��=>C:H:�L:6AI=N�ID�EJGHJ:�6�BDG:�ADLEGD;>A:�AJMJGN�L=>8=�L>AA�HE::9�JE�I=:�8JHIDB>O6I>DC�B6G@:I� >C��=>C6�6AHD�8G:6I>C<�9:K:ADEB:CI�DEEDGIJC>I>:H� ;DG�C>8=:�7G6C9H��,:H:6G8=�;>C9H�I=6I� >C�� ����=>C:H:�AJMJGN�8DCHJB:GH�=6K:�:B:G<:9�8DCHJBEI>DC�C::9H� ;DG� 8JHIDB>O6I>DC�L>I=�6� ;D8JH�DC�8ADI=>C<�?:L:AGN� =DB:� ;JGC>H=>C<�6C9�=><=:C9�<>;IH��.=:� G6C<:� ;DG� 8JHIDB>O6I>DC�K6G>:H�L>I=� 9>;;:G:CI� 6HH:I� HI6IJH:H�B6>CAN� IDJI:9� 7N� 7>AA>DC6>G:H� I=6I�8JHIDB>O:�:K:GN�6HE:8I�D;�I=:>G�A>;:HINA:�

The(Preference(of(Customized(Products(for(The(Chinese(Wealthy(are:(

Clothing,(Jewelry,(Home(Furnishing(and(HighVend(Gifts

Billionaires(Have(Their(Entire(Lifestyle(Customized

�M=>7>I��� ��JHIDB>O6I>DC�(::9H�06G>:H�;DG��DCHJB:GH�L>I=��>;;:G:CI��HH:IH

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Less than 10 million RMB

Clothing

Jewelry

Home furnishing

High;end gifts

10;50 million RMB

Jewelry

Home furnishing

High;end gifts

Leather goods

Clothing

50;100 million RMB

Jewelry

Home furnishing

High;end gifts

Leather goods

Watches

Luxury cars

Clothing

Over 100 million RMB

Jewelry

Home furnishing

High;end gifts

Leather goods

Watches

Luxury cars

Luxury yachts

Private jets

Luxury real estate

Travel

...

High; end recreations

Clothing

Page 54: Fortune Character China Luxury Report 2012

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"DL:K:G� X8JHIDB>O6I>DCY� ;DG� 7G6C9H� >H� >I� 6�B6G@:I� HIG6I:<N�DG�B:6CH�D;�B6G@:I�H:GK>8:��1DJA9�8JHIDB>O:9�EGD9J8IH�8A6H=�L>I=� I=:�JHJ6A�HI6C96G9�EGD9J8IH�D;�I=:�7G6C9��&JMJGN�7G6C9H�=6K:�9>K:GH>;>:9�EGD9J8I�A>C:H�;DGB>C<�6� XENG6B>9Y� EGD9J8I� HIGJ8IJG:� EGDK>9>C<�9>;;:G:CI� EGD9J8IH� ;DG� 8DCHJB:G�<GDJEH�L>I=� 9>;;:G:CI� HE:C9>C<� EDL:G�� DG� >CHI6C8:� C:L�:B:G<>C<� G>8=�EDEJA6I>DC�B6N� HI6GI� D;;�L>I=� 76H>8� HINA:H� 6C9�L>I=� I=:�688JBJA6I>DC�D;�L:6AI=� HI:E� >CID� =><=:G� A:K:AH� D;� 8A6HH>8� :9>I>DCH�� #C� I=:�C:MI� HI6<:�L>AA�EJGHJ:�BDG:� >C9>K>9J6A>O:9�6C9�8JHIDB>O:9�EGD9J8IH��1>I=� 8JHIDB>O6I>DC�688G:9>I:9� 6H� X� ,:6A� &JMJGN� Y� 8JHIDB>O6I>DC� 6C9� I=:� HI6C96G9H� =6K:�696EI:9�ID�I=:�C::9H�D;�9>;;:G:CI�8DCHJB:G�A:K:AH�=DA9>C<�DC�ID�6AA�@>C9H�D;�8JHIDB:GH�68=>:K>C<�8DCHJBEI>DC�JE<G69:�

Page 55: Fortune Character China Luxury Report 2012

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61%

51%46%

42%

16%20%

17%

5%

25%

12% 13%

4%

29%

9%8%

3%

26%

6% 5%2%0%

10%

20%

30%

40%

50%

60%

70%

Less-than-10-million 10-6-50-million 50-6-100-million Over-100-million

Personal-use- Business-gifts Hobbies Retain&incresase-value Other

Wealthy(Chinese(Population(Prefers(Luxury(Goods(with(Collecting(and(

Investing(Values(

�M=>7>I������>;;:G:CI��DCHJB>C<�*JGEDH:H�D;��DCHJB:GH�L>I=��>;;:G:CI��HH:IH

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6.( Social( functions( of( luxury( products( being( highlightedZ(

Wealthy(Chinese( tend( to( collect( luxury(goods(with( value( for(

investment

�H>6C� 8JAIJG:�=6H�6�9>HI>C8I� 8JAIJG:�9>;;:G:CI� ID��JGDE:6C� 8DJCIG>:H� 6C9�I=:>G� ILD�B6>C�D7?:8I>K:H�D;� EJG8=6H>C<� AJMJGN�EGD9J8IH�6G:� ;DG� 7JH>C:HH�<>;I>C<� 6C9� >CK:HIB:CI� 6C9� 8DAA:8I>DC� =><=A><=I>C<� I=:� HD8>6A� ;JC8I>DC� D;�AJMJGN� EGD9J8IH�� ,:H:6G8=� ;>C9>C<H� >C9>86I:� I=6I� �=>C:H:� 8DCHJB:GH[�7JH>C:HH�G:A6I:9�<>;I>C<�:ME:C9>IJG:H�D;�AJMJGN�EGD9J8IH�6G:�6GDJC9�� � ���DCHJB:GH�L>I=�6HH:IH�D;�,'��� � �B>AA>DC�6G:�G>H>C<�>C�I=:>G�EGD;:HH>DC6A�86G::GH�I=:>G�AJMJGN�7JH>C:HH�<>;I>C<�HE:C9>C<�>H�=><=:G�6I�6GDJC9�����

Page 56: Fortune Character China Luxury Report 2012

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Cigarettes)

&)Liquor))

Handbags Watches Jewelry Cosmetics)

&)Perfume)

Clothing Artwork

Top)3)under)10)million)RMB:)perfume)&)cosmetics,)handbags),)cigarette)&)liquor

Top)3)10)I)50)million)RMB:)watches,)perfume)&)cosmetics),)handbags

Top)3)over)50)million)RMB:)watches,)jewelry),artwork

17%20%

15%

23%26%

13%

10%

23%22%

25%

7%5%

11%9% 8%

6%

15%16%

8%9%

12%

High(Asset(Luxury(Consumers(Tend(to(Have(Luxury(Watches,(

Jewelries(and(Artworks(for(Business(gifting

�M=>7>I������>;;:G:CI��HH:I��DCHJB:GH��*G:;:G:C8:H�;DG�&JMJGN�!DD9H�L=:C��C<6<:9�>C��JH>C:HH�!>;I>C<

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Page 57: Fortune Character China Luxury Report 2012

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7%Luxury&products&

Diamonds

Stock&&&Bonds

6%

1%Other 1%

Real&Estate40%

Artwork26%

Other15%

PreciousMetals&15%

Antiques4%

.=:� G>8=�EDEJA6I>DC�=6H�BDG:�67>A>IN� ID� >CK:HI�6C9�8DAA:8I� AJMJGN�EGD9J8IH�688DG9>C<� ID�DJG� G:H:6G8=�=>C:H:�8DCHJB:GH� K>:L�L6I8=:H� AJMJGN� 86GH�6C9� ?:L:AGN� 6H� I=:� IDE� I=G::� AJMJGN� <DD9H� I=6I� G:I6>C� I=:�BDHI� K6AJ:���DCHJB:GH�L>I=� A:HH� I=6C�,'��� �B>AA>DC� >C�6HH:IH�K>:L� A:6I=:G�EGD9J8IH�?:L:AGN� 6C9�L6I8=:H�6H� I=:�7:HI� G:I6>C:9� K6AJ:���DCHJB:GH�L>I=�6HH:IH�7:IL::C�,'��� � �B>AA>DC�8=DDH:� ?:L:AGN� A:6I=:G�EGD9J8IH�6C9�L6I8=:H��1=:C�8DCHJB:GH�� 6HH:IH�6G:�DK:G�,'��� �B>AA>DC� I=:>G� EG:;:G:C8:H�6G:�L6I8=:H�6C9�?:L:AG>:H�

DG�7>AA>DC6>G:H� I=:N�=6K:�6� 8DBEA:I:AN�9>;;:G:CI� HI6C8:� ID�DI=:G�<GDJEH�.=:N� K>:L�L6I8=:H� ?:L:AGN� 6C9� A:6I=:G� EGD9J8IH� I=6I� G:I6>C� I=:�=><=:HI�K6AJ:���=>C:H:�8DCHJB:G� I=>C@�6GILDG@� G:6A� :HI6I:�6C9�6C8>:CI� 6GI>;68IH�6G:�EGD9J8IH�LDGI=� >CK:HI>C<� >C� AJMJGN�EGD9J8IH�DCAN�688DJCI� ;DG����6C9�6CDI=:G����D;�7>AA>DC6>G:H�6EEGDK:�D;�I=:�>CK:HIB:CI�K6AJ:�D;�9>6BDC9H�

Top(3(InvestmentVworthy(Luxury(Goods(in(the(Eyes(of(Chinese(Wealthy:(

Real(Estate,(Artworks(and(Precious(Metals

�M=>7>I������=>C:H:��DCHJB:GH[�#CH><=IH�DC��6I:<DG>:H�D;�#CK:HIB:CI1DGI=N�&JMJGN�!DD9H

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Page 58: Fortune Character China Luxury Report 2012

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12%

3%

4%

11%

17%

19%

Other

Yachts

Fine-Wine

LeatherGoods-

Jewelry

Luxury-Cars

Watches 34%

Top(3(Luxury(Goods(that(Retain(the(Most(Values(to(Chinese(

Consumers:(Watches,(Luxury(Cars(and(Jewelries

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Page 59: Fortune Character China Luxury Report 2012

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Top$3$Over$100$million$RMB:$real$estate,watches$,$luxury$cars$

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13%

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Page 60: Fortune Character China Luxury Report 2012

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Chapter FourDistribution Channelsof Luxury Brands in China

Page 67: Fortune Character China Luxury Report 2012

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1.(Main(characteristics(of(Chinese(consumers(who(shop(luxuries(online

1)(Online( shopping( attitude:(most( consumers(hold( a( positive( view(

regarding(online(shopping(for(luxury(products

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Section(One:(EVluxury(market(in(China

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Fairlyconfident)10%

Will)not)shop)online)33%

Page 68: Fortune Character China Luxury Report 2012

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Purchase(Luxury(Goods(Online

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2%

8%

53%

37%

1%

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7%

44%

48%

MaleFemale

Page 69: Fortune Character China Luxury Report 2012

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33%

8%4%

43%41%

10%6%

25%

54%

13%

8%

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52%

26% 49% 16% 9%

34% 8% 6%Tier$1$Cities

Tier$2$/$3$Cities

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Page 70: Fortune Character China Luxury Report 2012

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�=>C:H:� AJMJGN�8DCHJB:GH�7:A>:K:� I=6I�7JN>C<� AJMJGN�EGD9J8IH�DCA>C:�=6H�I=:�69K6CI6<:�D;�H6K>C<�I>B:���������;DAADL:9�7N�ADL:G�EG>8:H��� �����6C9�=DB:�9:A>K:GN�1=>8=�B:6CH� 8DCHJB:GH� 8=DDH:�DCA>C:� H=DEE>C<�6II68=�BDG:�>BEDGI6C8:�ID�I>B:�8DHIH�I=6C�EG>8:�9>H8DJCIH�I=:�EG>8:�L6G�HIG6I:<N�D;�:8DBB:G8:�7JH>C:HH:H�9D�CDI�;>I�DCA>C:�8DCHJB:GH[�;JC96B:CI6A� >CI:G:HIH��&JMJGN� 8DCHJB:GH� 6G:� CDI� EG>8:H:CH>I>K:� 6C9� EA68:�BDG:� K6AJ:� DC� I=:�8DCK:C>:C8:�A:K:A�7GDJ<=I�67DJI�7N�DCA>C:�AJMJGN�H=DEE>C<�

Will$not$shop$onlineWilling$to$tryFairly$confident$Completely$confident$

Will$not$shop$onlineWilling$to$tryFairly$confident$Completely$confident$

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

30$yo 40$yo 50$yo 50$and$above

7% 6% 5% 4%

23%

55%

15%

19%

43%

32%

15%

41%

39%

12%

38%

46%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

10M$andbelow$

10$E$50M 50$E$100M 100$and$above

16%

58%

18%14%

56%

25%

8% 5% 4%

13%

48%

35%

2%

11%

45%

42%

Page 71: Fortune Character China Luxury Report 2012

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Male(Online(Luxury(Consumers(Concern(about(Efficiency(Whereas(Female(

Consumers(Pay(More(Attention(to(Prices

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE�

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Consumers(Highlight(Time(Efficiency(When(Shop(Luxury(Goods(Online

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Time%Efficiency

Cheap%Price

DeliverStraight%to

Door

Variety

GuaranteedQuality

InstantAvailability%ofNew%Product

Others

24.7%

20.4%

17.2%

16.1%

11.8%

7.5%

2.3%

Cheap&Price Deliver&Straight&to&Door

Variety Time&Efficiency Guaranteed&Quality

Instant&Availabilityof&New&Products&

Others

19%22%

12%11%

28%

34%

9%

8%7%

3% 3%1%

31%

15%

Female Male

Page 72: Fortune Character China Luxury Report 2012

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Online(Luxury(Consumers(Born( after( the( 80’s( are(More(Concerned(with(

Product(Variety(and(Prices

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE�

�M=>7>I����%:N� 68IDGH��;;:8I>C<�)CA>C:�-=DEE>C<�D;�&JMJGN�!DD9H�;DG��DCHJB:GH�>C��>;;:G:CI��>I>:H�

Online( Luxury(Consumers( in( Tier( 2/3( Cities( are(More(Concerned(with(

Efficiency(Whereas(Those(in(Tier(1(Cities(Pay(More(Attention(to(Prices

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE�

29% 13% 38% 8% 4%4% 4%

38% 8% 35% 5% 3%8%

10%

19% 12% 26% 15% 11% 14% 3%

29% 12% 31% 10% 6% 2%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

21,-,30,yo

41,-,50,yo

51,andabove

Cheap,,Price Deliver,Straight,to,Door VarietyTime,Efficiency Guaranteed,Quality Instant,,Availability,of,,New,ProductsOthers

31,-,40,yo

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Cheap-Price Deliver-Straightto-Door-

Variety Time-Efficiency

Guaranteed-Quality

Instant-Availability-

of-New-Products

Others

Tier-1-cities Tier-2/3-cities

14%

26%

18%

28%

8%4%

1%

8%

37%

6%

43%

2%3%

2%

Page 73: Fortune Character China Luxury Report 2012

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3)(Authenticity( is( the(main( concern(of(Chinese( consumers(buying(

luxury(products(online

);�6AA� I=:�8DC8:GCH� ;DG�7JN>C<� AJMJGN�EGD9J8IH�DCA>C:� XEGD9J8I�6JI=:CI>8>INY�>H� I=:�B6>C�8DC8:GC� �������� ;DAADL:9�7N� XEGD9J8I�FJ6A>INY�������� X6;I:GH6A:H�H:GK>8:Y�� ����6C9� XE6NB:CI�H:8JG>INY������ >GHI�D;�6AA� 8DCHJB:GH[�LDGGN>C<�67DJI� I=:�6JI=:CI>8>IN�D;�6�EGD9J8I�6C9� >IH�FJ6A>IN�6G:� >C:K>I67A:���8DBB:G8:�B6N�7G:6@I=GDJ<=�I>B:�6C9�G:<>DC6A� A>B>I6I>DCH�7JI� ;6AAH�H=DGI�DC�K>HJ6A�6C9�:ME:G>:C8:�C::9H�L=>8=�86C�86JH:�8DCHJB:GH� ID�9DJ7I� I=:�FJ6A>IN�6C9�6JI=:CI>8>IN�D;�I=:�EGD9J8I�

�;I:GH6A:H�H:GK>8:�>H�I=:�I=>G9�7><<:HI�8DC8:GC�D;�AJMJGN�EGD9J8I�8DCHJB:GH�L=:C�7JN>C<�DCA>C:��1=:C�8DCHJB:GH�EJG8=6H:�AJMJGN�EGD9J8IH�6H>9:�;GDB�>IH�K6AJ:� I=:N�6G:�BDG:� >CI:G:HI:9� >C� I=:�699:9�K6AJ:�HJ8=�6H�8DCHJB:G�:ME:G>:C8:�6C9�6;I:GH6A:H�H:GK>8:�:I8���K:C�>;�7JN>C<�;GDB�6C�DCA>C:�HIDG:�8DCHJB:GH�L>H=�ID�G:8:>K:�I=:�H6B:�H:GK>8:�6H�6�7G>8@6C9BDGI6G�HIDG:�7JI�K>GIJ6A�:8DBB:G8:�:CK>GDCB:CI�B6@:H� >I�=6G9� ID�<J6G6CI::� I=:�6;I:GH6A:H�H:GK>8:�6C9�FJ6A>IN�

.=:�=><=�K6AJ:�D;� AJMJGN�EGD9J8IH�=6H�:A:K6I:9� I=:� >BEDGI6C8:�D;� AD<>HI>8H�7:86JH:� >;� 96B6<:� >H� 86JH:9� 9JG>C<� I=:� IG6CHEDGI6I>DC� EGD8:HH� >I� L>AA�>C:K>I67AN�86JH:�9>HEJI:� >;� I=:�8DHI�C::9:9� ID� G:HDAK:� I=:�9>HEJI:�:M8::9H�8DCK:C>:C8:�K6AJ:�8DCHJB:GH�L>AA�<>K:�JE�DCA>C:�H=DEE>C<�

��������&)&#*�� �$&��#$�(�%������ �%�� #%���#��� #��� ���#����(�%����/�����*�

�M=>7>I��� �%:N� 68IDGH��;;:8I>C<�)CA>C:�-=DEE>C<�D;�&JMJGN�!DD9H�;DG��DCHJB:GH�L>I=��>;;:G:CI��HH:IH

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE�

22%

23%

18%

19%

29%

18%

24%

16%

37%

10%

25%

10%

42%

8%

26%

9%

11%

6% 7%4% 9%

5%10%2%

1% 2% 4% 3%

10M$and$below 10$-$50M 50$-$100M 100M$and$aboveUnit:RMB

Others

Instant$Availability$of$NewProducts$

Guaranteed$Quality

Time$Efficiency

Variety

Deliver$Straight$to$Door

Cheap$Price

Page 74: Fortune Character China Luxury Report 2012

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TOP(3(Concerns(of((Online(Luxury(Consumers:(

Product((Authenticity,(Product(Quality,(AfterVsales(Service

Male(Online(Consumers(are(More(Concerned(with(Product(Authenticity(

than(Female

�M=>7>I������>;;:G:CI��DC8:GCH�;DG�)CA>C:�-=DEE>C<�D;�&JMJGN�!DD9H�;DG��DCHJB:GH�D;��>;;:G:CI�!:C9:GH

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Product(Authenticity(48.3%

Others0.1%

Return(Policy6.7%

After(4(salesService10.1%

Payment(Security9.0%

Product(Quality25.8%

1%

7%

10%

18%

21%

43%

2%

6%

14%

17%

23%

38%

Others

Return*Policy

After*3*salesService

PaymentSecurity

ProductQuality

ProductAuthenticity

Female Male

Page 75: Fortune Character China Luxury Report 2012

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Elder(Online(Luxury(Consumers(are(More(Concerned(about(Product(Authenticity

�M=>7>I������>;;:G:CI��DC8:GCH�;DG�)CA>C:�-=DEE>C<�D;�&JMJGN�!DD9H�;DG��DCHJB:GH�D;��>;;:G:CI��<:H

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The(Higher(the(Net(Worth(of(Online(Luxury(Consumers,(the(More(

Concerns(There(are(for(Product(Authenticity

�M=>7>I������>;;:G:CI��DC8:GCH�;DG�)CA>C:�-=DEE>C<�D;�&JMJGN�!DD9H�;DG��DCHJB:GH�L>I=��>;;:G:CI��HH:IH

Others

Return*Policy

After*3*salesService

PaymentSecurity

ProductQuality

ProductAuthenticity

4%

11%

10%

17%

27%

31%

3%

9%

9%

16%

28%

35%

1%

7%

8%

13%

30%

41%

2%

6%

6%

12%

31%

43%

51*and*above41*3*50*yo

31*3*40*yo

21*3*30*yo

36% 38% 42% 43%

24%

10%

11%

16%

3%

27%

9%

15%

9%

2%

28%

5%

16%

8%1%

29%

4%

17%

6%1%

10M$and$below 10$-$50M 50$-$100M 100M$and$aboveUnit:RMB

Others

Return$Policy

After$-$salesService

Payment$Security$

Product$Quality

Product$Authenticity$

Page 76: Fortune Character China Luxury Report 2012

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2.(Issues(with(eVluxury(market(in(China

.=:�9:K:ADEB:CI�D;�9DB:HI>8�:AJMJGN�=6H�7::C�9>;;>8JAI�JCHI67A:�HJEEA>:H�>H� I=:�7><<:HI�D7HI68A:� ;DAADL:9�7N� I=:� A68@�D;�8JHIDB:G�H:GK>8:�6C9�6;I:GH6A:H�H:GK>8:H�

The(Pressures(to(Local(EVLuxury(Companies((Unit:(Point)

�M=>7>I�����.=:�*G:HHJG:H�DC�&D86A��AJMJGN��DBE6C>:H

3.3%Unstable)resource

Lack)in)customer)feedback)and)poor)after5sales)service

High)promotion)expenses

Low)customer)loyalty

Inefficient)logistics

Difficulty)with)capital)raising

33.5

3

2.5

2

1.5

1

0

3.1%

2.8%

1.8%

2.1%

2.5%

Page 77: Fortune Character China Luxury Report 2012

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1)(Hard(to(maintain(a(steady(supply(of(goods

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DG� 9DB:HI>8� :AJMJGN� 7JH>C:HH:H� HJEEAN� =6H� 6AL6NH� 7::C� I=:� 7><<:HI�D7HI68A:� ;DG�9:K:ADEB:CI��)CAN� I=:� G6G:�9DB:HI>8�:AJMJGN�7JH>C:HH:H�86C�B6C6<:� ID�<:I�6�9>G:8I�HJEEAN�D;� AJMJGN�7G6C9H� I=GDJ<=�EGD8JG:B:CI�6C9�8DAA67DG6I>DCH�L>I=�AJMJGN�7G6C9H�L>AA�DCAN�7:�D;�I:BEDG6GN�G:A>:;�>I[H�=6G9�ID�<J6G6CI::�HI67A:�6C9�8DCI>CJDJH�6BDJCI�D;�HJEEA>:H���H>9:�;GDB�I=6I�AJMJGN�7G6C9H�=6K:�I=:>G�DLC�D;;>8>6A�L:7H>I:H�HJ8=�6H��GB6C>�6C9��JG7:GGN�AJMJGN�7G6C9H�86C�DE:G6I:�6C9�B6>CI6>C�I=:>G�L:7H>I:H�B6@>C<�>I�:6HN�ID�B6>CI6>C�7G6C9�>B6<:�6C9�7G6C9�K6AJ:�6C9�I=>H�B6@:H�>I�=6G9�;DG�:AJMJGN�7JH>C:HH:H�ID�<6>C�9>G:8I�6JI=DG>O6I>DC�D;�AJMJGN�7G6C9H�ID�HDB:�:MI:CI�

2)(Lack(of(customer(experiences(and(afterVsales(services

1=:C�8DCHJB:GH�7JN� AJMJGN�EGD9J8IH�6H>9:� ;GDB� I=:�EGD9J8I� >IH:A;� I=:N�86G:�BDG:�67DJI� I=:�EJG8=6H:�:ME:G>:C8:�6C9�6;I:GH6A:H�H:GK>8:H��.=>H� >H�6C� >BEDGI6CI� G:;A:8I>DC�D;� I=:�699:9K6AJ:�D;� AJMJGN�EGD9J8IH�L=>8=� >H� I=:�EG:8>H:�L:6@C:HH�D;�9DB:HI>8�:AJMJGN����J:�ID�I=>H�G:6HDC�8DCHJB:GH�6G:�BDG:�>C8A>C:9�ID�H=DE�>C�68IJ6A�7G>8@6C9BDGI6G�HIDG:H�ID�7:�67A:�ID�;::A�6C9�IGN�DC�EGD9J8IH�>C�E:GHDC���AJMJGN�JH>C<�XDCA>C:�H6A:H���D;;A>C:�:ME:G>:C8:Y�LDJA9�7:�I=:�E:G;:8I�B6GG>6<:�D;�8DCK:C>:C8:�6C9�6;I:GH6A:H�H:GK>8:�

#C�;68I�9DB:HI>8�:AJMJGN�8DBE6C>:H�=6K:�6AG:69N�DE:C:9�7G>8@6C9BDGI6G�HIDG:H�HJ8=�6H��AJM�8DB�-:8DD�6C9�-:HJC���G>8@6C9BDGI6G�HIDG:H�B6@:�JE� ;DG� I=:� A68@�D;�:ME:G>:C8:�6C9�6;I:GH6A:H�H:GK>8:H� ;GDB�DCA>C:�HIDG:H�

Main%Methods Approach

1.%Regular%purchase Purchase%directly%from%the%brand

2.%Procurement%ofleftover%inventory

Procure%leftover%inventory%directly%from%thebrand%or%purchase%discounted%or%past=seasonmodels%from%resellers

3.%Smuggling Illegally%taking%goods%from%OEM%factories

4.%Pass%as%genuineMisrepresenting%fake%goods%as%authentic%andovercharging

5.%Joint%development E=commerce%vendors%jointly%develop%productswith%a%brand

Page 78: Fortune Character China Luxury Report 2012

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3)(Lacking(of(customer(loyalty

DG � 9DB:HI > 8 � : AJMJGN � 7JH >C:HH �8 J H I DB: G � A D N6 A I N � > H � 9 : 8 > 9:9 � 7 N�H:GK>8:� 6C9� 8DCHJB:G� :ME:G>:C8:�I=:� ADL� EG>8:� 6C9� 9>H8DJCI� HIG6I:<N�9D:H� CDI � G:I6 >C� 8JHIDB:GH� � 1=> A:�I=:� D886H>DC6A � 9 >H8DJCI � B6N� EJA A�8JHIDB:GH�8ADH:G� ;G:FJ:CI�EGDBDI>DCH�L > A A � B6@:� 8DCHJB:GH � =:H > I6 I: � ID�; >C9� I=:� X7:HI� 9>H8DJCIY� 6C9� 9:A6N�EJG8=6H:H�96B6<>C<�9DB:HI>8� AJMJGN�:8DBB:G8:ZH� H=DGII:GB� <6>CH� 6C9�A:HH:C�8DCHJB:GH[�DCA>C:�7JN>C<�>C�I=:�ADC<� GJC�� #I[H� =6G9� ID� @::E� EJG8=6H:�HI>8@N�=:C8:�I=:�8A>:CI�ADN6AIN�>H�ADL�>C�9DB:HI>8�AJMJGN�:8DBB:G8:�B6G@:I�

4)( Lacking( of( premium( logistics(

services

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5)(High(operational(costs

)E:G6I>DC6A�8DHIH�D;�9DB:HI>8�:8DBB:G8:�6G:�8DC8:CIG6I:9�>C�EGD9J8I�HDJG8>C<�6C9�B6G@:I�EGDBDI>DCH�L=>8=�6G:� I=:�B6>C�D7HI68A:H�A>B>I>C<�:AJMJGN�7JH>C:HH:H�ID�9:K:ADE���=>C:H:� :8DBB:G8:� 7G6C9H�6G:�BDHIAN�HB6AA�>C�H86A:�B6@>C<�6C9�6G:�JC67A:�ID�E6N�=><=�6BDJCIH�D;�B6G@:I>C<�8DHIH��-D��=>C:H:�:AJMJGN� 8DBE6C>:H�7G6C9H�:6GC� ADL�7G6C9�6L6G:C:HH�6C9�A>IIA:�G:EJI6I>DCH�

.=:�EG:H:CI�DK:G6AA�7JH>C:HH�H>IJ6I>DC�>H�CDI� >9:6A�6C9��=>C:H:�:8DBB:G8:�=6H � HJ ; ;: G:9 � ; GDB� >C > I >6 A A N � 7: >C<�;6KDG:9�7N�I=:�86E>I6A�B6G@:I� ID�7:>C<�A:;I� 7:=>C9�� #I�L>AA� I6@:� HDB:� I>B:� ID�H:IIA:�I=>H�9>A:BB6�

Page 79: Fortune Character China Luxury Report 2012

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1.(Three(trends(in(2012(of(the(secondVhand(luxury(market(in(China

1)(Continuous(expansion(of(market(capacity

�AI=DJ<=�I=:G:�=6H�7::C�6�HA><=I�:8DCDB>8�HADL9DLC�>C�� ���>I�=6H�CDI�6;;:8I:9�H:8DC9=6C9� AJMJGN�H=DEH� ID�DE:C�G6E>9AN�6I�6AA���88DG9>C<� ID� >C8DBEA:I:�HI6I>HI>8H� I=:�CJB7:G�D;�H:8DC9=6C9�AJMJGN�H=DEH�<G:L�;GDB�����>C� I=:�A6HI�N:6G� ID�����HIDG:H�I=>H�N:6G�L>I=�6�<GDLI=�G6I:�6I�� �����.=:�C:LAN�:ME6C9:9�HIDG:H�6G:�CD� ADC<:G�8DC8:CIG6I:9� >C� ;>GHII>:G�8>I>:H� A>@:��:>?>C<�6C9�-=6C<=6>�7JI�HEG:69� I=GDJ<=DJI�H:8DC9� I>:G�8>I>:H�HJ8=�6H��=6C<H=6�"6C<O=DJ�6C9��=:C<9J�:I8��X >GHII>:G�8>I>:H�<J>9>C<�H:8DC9�6C9�I=>G9I>:G�8>I>:H�:ME6C9>C<Y�=6H�7:8DB:� I=:�B6>C�B6G@:I�HIGJ8IJG:�9J:� ID�� ;>GHII>:G� AJMJGN�B6G@:IH�6G:�BDG:�B6IJG:� AJMJGN�8DCHJBEI>DC�<G69J6AAN�7:8DB>C<�G6I>DC6A�8DCHJB:GH�=6K:�6�BDG:�

�M=>7>I����-I6I>HI>8H�;DG��=>C6�H�-:8DC9"6C9�&JMJGN�!DD9H�-IDG:H

�6I6�-DJG8:� DGIJC:��=6G68I:G��!GDJE�6H:9�DC�EJ7A>8�6K6>A67A:�>C;DGB6I>DC

DE:C�8DCHJBEI>DC�8DC8:EI�6C9�6G:�BDG:�:6<:G�ID�688:EI�C:L�8DCHJBEI>DC�>9:6H�B6@>C<�;>GHII>:G�8>I>:H� I=:�B6>C�B6G@:I��"DL:K:G�H:8DC9=6C9�AJMJGN�B6G@:I� >H� ?JHI�7:<>CC>C<� ID�7ADHHDB�>C�H:8DC9I>:G�8>I>:H�L=>8=�>H�I=:�7:HI�DEEDGIJC>IN�;DG�AJMJGN�7JH>C:HH:H�ID�G6E>9AN�L>C�I=:�B6G@:I�6C9�8JAI>K6I:�8DCHJB:GH�6C9�A:69>C<�8=6C<:H�>C�8DCHJBEI>DC�8DC8:EIH�

Section(Two:(SecondVhand(luxury(market(in(China

425466

512568

10.2% 9.6% 9.9%10.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

100

200

300

400

500

600

2009 2010 2011 2012

Number1of1Stores Growth1rate

Page 80: Fortune Character China Luxury Report 2012

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2)(More( diversified( products( with( investment( value( are( becoming(

increasingly(critical

�DBE6G:9� ID�EG:K>DJH�N:6GH� I=:�H:8DC9=6C9� AJMJGN�B6G@:I� >H�7:8DB>C<�BDG:�9>K:GH>;>:9� ;GDB� IG69>I>DC6A� AJMJGN� <DD9H� HJ8=�6H� A:6I=:G� EGD9J8IH�8ADI=>C<�L6I8=:H�6C9� ?:L:AGN� ID�6CI>FJ:H�86AA><G6E=N�6C9�E6>CI>C<H�=DB:�;JGC>H=>C<�6C9�9><>I6A�EGD9J8IH�:I8��.=:�BDG:�9>K:GH>;>:9� I=:�EGD9J8IH�6G:�I=:� :6H>:G� ID� 6IIG68I�BDG:� 8DCHJB:GH���>K:GH>;>:9� EGD9J8I� A>C:� :ME6C9H�I=:�B6G@:I� 7JI� EDHIEDC:� 8JHIDB:G� HE:C9>C<�6I� I=:� H6B:� I>B:���AI=DJ<=�8DCHJB:G� EGD9J8IH� HI>AA�B6>CAN�B6@:� JE� H:8DC9=6C9� AJMJGN� EGD9J8IH�>CK:HIB:CI� EGD9J8IH� >H� >C8G:6H>C<� >IH� EGDEDGI>DC��1:� 86C� 8DB:� ID� I=:�8DC8AJH>DC� I=6I� H:8DC9=6C9� AJMJGN� <DD9H� 6G:� <6>C>C<� 688:EI6C8:� 6C9�6EEGDK6A�6H�6�L6N�ID�EG:H:GK:�6C9�>C8G:6H:�6HH:I�K6AJ:�

3)(Top(niche(brands(are(encountering(a(chilly(reception(in(the(secondV

hand(market

�G6C9H� I=6I� 6G:� EDEJA6G�L>I=>C� I=:� H:8DC9=6C9� AJMJGN�B6G@:I�L:G:�L>I=DJI�:M8:EI>DC�6AA� 7G6C9H�L>I=�JAIG6�=><=�B6G@:I� G:8D<C>I>DC�6C9�B6G@:I�688:EI6C8:��!DD9�B6G@:I� G:EJI6I>DC�=6H�7G:9�EDI:CI>6A� 8JHIDB:GH� 6AADL>C<� I=:H:�EGD9J8IH�ID�8DCI>CJ:� ID� G:I6>C�6C9� >C8G:6H:�K6AJ:� >C� I=:�H:8DC9=6C9� AJMJGN�B6G@:I��1=>A:�HDB:�7G6C9H�E:G;DGB�L:AA�>C�I=:�EG>B6GN�B6G@:I�HB6AA�C>8=:�8DCHJB:G�7G6C9H�DCAN�=6K:�=><=�7G6C9�G:8D<C>I>DC�6C9�<DD9�B6G@:I�G:EJI6I>DC�L>I=>C�6�HE:8>;>8�8DCHJB:G�<GDJE�I=:N�A68@�6�L>9:G�7G6C9�6L6G:C:HH�6C9�8JHIDB:G�76H:�"DL:K:G�8DCHJB:G�<GDJEH�>C�I=:�H:8DC9�B6G@:I�6G:�BDG:�B6HH�8DCHJB:GH�HD�>I�>H�CDI�HJGEG>H>C<�I=6I�I=:N�9D�EDDGAN� >C�H:8DC9=6C9�B6G@:IH��.=:�E:G;DGB6C8:�D;�H:8DC9=6C9� AJMJGN�B6G@:IH�L>AA�6;;:8I�EG>B6GN�B6G@:I�8DCHJB:GH[�8DC;>9:C8:��.=:G:;DG:�=6K>C<�6�L:AA@CDLC�C6B:�L>AA�=:AE�7DDHI� I=:�8>G8JA6I>DC� >C� I=:�H:8DC96GN�B6G@:I�L=>A:�9G>K>C<�;>GHI=6C9�B6G@:I�H6A:H�6I�I=:�H6B:�I>B:�

Top(3(Products(in(SecondVhand(

Luxury(Market:(

Leather(Goods,(Apparel(and(Watches

y

�M=>7>I�����'6>C�*GD9J8IH�>C�-:8DC9"6C9�&JMJGN�'6G@:I

�6I6�-DJG8:� DGIJC:��=6G68I:G��!GDJE

Apparel30%

Jewelry12%

Watches19%

LeatherGoods36%

Others3%

The$most$popular$luxurybrands$in$second$5$handluxury$market

Page 81: Fortune Character China Luxury Report 2012

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2.(Four(characteristics(of(the(secondVhand(luxury(market(consumers

1)(Youth(generationV(mainly(composed(of(“the(postV(80s”

)JG� G:H:6G8=� G:HJAIH�H=DL� I=6I� I=DH:�7:IL::C�6<:H���� ID�� �6G:� I=:�B6>C�8DCHJB:GH�D;� I=:�H:8DC9=6C9� AJMJGN�B6G@:I� ;DAADL:9�7N� XI=:�EDHI� HY� >C�I=:����ID�� �6<:�<GDJE��.=:H:�G:HJAIH�6G:�K6HIAN�9>;;:G:CI�ID�I=:�DC:H�>C�� ���BDHIAN�7:86JH:�D;�I=:�6;I:GB6I=�D;�I=:�� ���:8DCDB>8�HADL9DLC��X.=:�EDHI� HY�8DCHJB:G�<GDJE�6G:�IG:C9N�6C9�NDJC<�I=:N�EJGHJ:�AJMJGN�EGD9J8IH�7JI�6G:�H:CH>I>K:� ID�EG>8>C<��-D�H:8DC9=6C9�H=DEH�L>I=�FJ6A>IN�EGD9J8IH� ;DG�6C�:M8:AA:CI�EG>8:�6G:�I=:�>9:6A�8=D>8:�;DG�H6I>H;N>C<�I=:>G�8DCHJBEI>DC�C::9H�

2)(Consumers(who(are(“rich(aspirants”

.=DJ<=� I=:� :8DCDB>8� HADL9DLC� 6;;:8I:9��=>C:H:�L:6AI=N� 8DCHJB:GH[�8DC\9:C8:�I:BEDG6G>AN� >I�=6H�CDI�E=6H:9�I=:>G�HE:C9>C<�EDL:G���JI�:8DCDB>8�H>IJ6I>DC�=6H�6�BDG:�D7K>DJH�>BE68I�IDL6G9H�I=:�8DCHJB:G�<GDJE�6�A>IIA:�7:ADL�I=:�L:6AI=N�EDEJA6I>DC�L=DB�L:�86AA� XG>8=�6HE>G6CIHY��.=>H�<GDJE� >H� I=:�BDHI�68I>K:�<GDJE�>C�I=:�H:8DC9=6C9�AJMJGN�B6G@:I�L>I=�6HH:IH�A:HH�I=6C�� �B>AA>DC��XG>8=�6HE>G6CIHY�N:6GC�;DG�I=:�A>;:HINA:�D;�I=:�G>8=�7JI�9J:�ID�\C6C8>6A�A>B>I6I>DCH�H:8DC9=6C9� IG69>C<�H6I>H;>:H� I=:>G� 8DCHJBEI>DC�C::9H��1=:C�8DCHJB:GH[�6HH:IH�G>H:�67DK:�,'��� �B>AA>DC�:CI=JH>6HB�IDL6G9H�I=:�H:8DC9=6C9�AJMJGN�B6G@:I�9GDEH�H=6GEAN��.=:N�7:8DB:� A:HH�EG>8:�H:CH>I>K:�L>I=� A>IIA:� ;>C6C8>6A�EG:HHJG:�=DA9>C<� AJMJGN�EGD9J8IH�6H�6�B:I=D9�D;� G:I6>C>C<�6C9� >C8G:6H>C<�K6AJ:�HD�I=:�H:8DC9=6C9�AJMJGN�B6G@:I�>H�CDI�I=6I�6EE:6A>C<�ID�I=:B�

21V30(Years(Old(are(the(Main(Consumers(of(the(SecondVhand(Luxury(Goods

�M=>7>I������<:��>;;:G:C8:H�>C��DCHJB:GH[�1>AA>C<C:HH�ID�I=:��M8=6C<:�D;�-:8DC9"6C9�&JMJGN�!DD9H

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14%

46%

21% 14%

5%13%

43%

27%

13%

4%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

20(and(below 211 30(yo 311 40(yo 411 50(yo 51(and(above

Sold Bought

Page 82: Fortune Character China Luxury Report 2012

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3)(Consumers(with(a(bachelor’s(degree(are(more(willing(to(buy(secondV

hand(luxury(products

��9>H8DK:G:H� I=6I�BDHI� D;� I=:� E6GI>8>E6CIH� >C� I=:� H:8DC9=6C9� AJMJGN�B6G@:I� =DA9� 768=:ADG� 9:<G::H� ;DAADL:9� 7N� E6GI>8>E6CIH�L>I=� 6�B6HI:G�9:<G::���DCHJB:GH�L>I=� =><=:G� A:K:AH� D;� :9J86I>DC� �>C8AJ9>C<�768=:ADGH�6C9�B6HI:GH�� =6K:�6�BDG:�DE:C�6II>IJ9:�D;� 8DCHJBEI>DC�6C9�6G:� =6EEN�ID� IGN�C:L� I=>C<H�B6@>C<� I=:B�BDG:�L>AA>C<� ID� IG69:�H:8DC9=6C9� AJMJGN�EGD9J8IH��'DG:DK:G�:6GANHI6<:�:CIG:EG:C:JGH�6C9�8DGEDG6I:�B6C6<:GH�6AHD�B6>CAN�=DA9�768=:ADG�9:<G::H� I=>H�<GDJE� >H�G>H>C<� >C� I=:�EGD;:HH>DC6A�LDGA9�I=:�C::9� ID�E68@6<:� I=:BH:AK:H�6C9�7JH>C:HH�<>;I>C<� >H�=><=:G�7JI�9J:� ID�;>C6C8>6A�G:HIG>8I>DCH�H:8DC9=6C9�AJMJGN�EGD9J8IH�6G:�6�<DD9�DEI>DC�ID�<6>C�;68:�6I�6�G:A6I>K:AN�ADL:G�EG>8:�

Assets(are(the(Key(Factor(that(Affects(SecondVhand(Luxury(Goods(

Transactions:

Consumers(with(Assets(from(RMB(10M(to(50M(are(the(Active(Group(for(

SecondVhand(Luxury(Goods(Purchasing(

�M=>7>I��� ��HH:IH��>;;:G:C8:H�>C��DCHJB:GH[�1>AA>C<C:HH�ID�I=:��M8=6C<:�D;�-:8DC9"6C9�&JMJGN�!DD9H

3%

7%

10%

39%

41%

3%

6%

10%

37%

44%

500M$andabove

100-500M

50$-$100M

10-50M

10M$andbelow

Bought Sold

Unit:RMB

Page 83: Fortune Character China Luxury Report 2012

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Consumers(with(Undergraduate(Degree(are(the(Most(Willing(for(SecondV

hand(luxury(Goods(Purchasing

4)(SecondVhand(luxury(market(is(mainly(composed(of(female(consumers

'6A:�8DCHJB:GH�6G:�BDG:�8DC8:GC:9�L>I=� X<G68:;JAY�H:8DC9=6C9� IG6CH68I>DCH� >H�8DCH>9:G:9� XADH>C<�:A:<6C8:Y� ID� I=:B���JI� ;:B6A:�8DCHJB:GH�6G:�BDG:�H:CH>7A:�I=6C� I=:>G�B6A:�8DJCI:GE6GIH�.=:N�6G:�:6H>AN�6;;:8I:9�7N�HJGGDJC9>C<�:CK>GDCB:CI�6C9�7:C:;>IH��-:8DC9=6C9� AJMJGN�EGD9J8IH�=6K:�6� ADL�EG>8:�69K6CI6<:�L=>8=� >H�6� HIGDC<�6IIG68I>DC��.=GDJ<=�H:AA>C<�JCJH:9� AJMJGN�EGD9J8IH� ID� >C8G:6H:� A>FJ>9>IN�A6G<:AN�86I:GH�ID�;:B6A:�8DCHJB:GH[�8DCHI6CI�8DCHJBEI>DC�C::9H�;DG�C:L�EGD9J8IH�

�M=>7>I������:<G::��>;;:G:C8:H�>C��DCHJB:GH[�1>AA>C<C:HH�ID�I=:��M8=6C<:�D;�-:8DC9"6C9�&JMJGN�!DD9H

�M=>7>I�����!:C9:G��>;;:G:C8:H�>C��DCHJB:GH[�1>AA>C<C:HH�ID�I=:��M8=6C<:�D;�-:8DC9"6C9�&JMJGN�!DD9H

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16% 43% 41%

17% 45% 38%

Below&undergraduate Undergraduate Graduate(Master/MBA/EMBA)

Bought

Sold

Female67%

Male33%

Bought

Female171%

Male29%

Sold

Women are the most willing to transact in the second2hand luxury goods market, they are the major consum2ers of scarves, accesso2ries, handbags, backpacks, etc.; Male consumers on the other hand, mostly purchase upscale station2ery, lighters, small leather goods, briefcases, travel bags and small accesso2ries. 21230 year olds mainly comprise this market.

Page 84: Fortune Character China Luxury Report 2012

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Brick&and&Mortar76.2%

Online&shop19.3%

Others4.5%

3.(Developing(trends(of(secondVhand(luxury(market(in(China

1)(From(“dealers”(to(“service(providers”

-:8DC9=6C9�AJMJGN�B6G@:I�>H�>C�I=:�HI6GIJE�HI6<:�H:8DC9=6C9�DE:G6IDGH�76H:9�I=:>G�7JH>C:HH�BD9:A�DC� I=:�8JGG:CI�B6G@:I� H>IJ6I>DC�L>I=�EGD;>IH� 8DB>C<� ;GDB�I=:�EG>8>C<�9>;;:G:C8:�6C9�8DBB>HH>DC�>C�I=:�76GI:G>C<�HI6<:�L=>8=�B:6CH�I=:H:�DE:G6IDGH�EDH>I>DC� I=:BH:AK:H�6H� X9:6A:GHY���JI� ADD@>C<� >CID� I=:� AJMJGN�EGD9J8I�>C9JHIGN�K6AJ:�>C�I=:�EG>B6GN�B6G@:I�>H�CDI�6H�=><=�6H�I=:�H:8DC96GN�B6G@:I���C9�H:8DC9=6C9�B6G@:I� K6AJ:� >H�CDI�6H�=><=�6H� I=:�H:GK>8:�B6G@:I��-:8DC9=6C9�AJMJGN�EGD9J8I�9:6A:GH�H=DJA9�EDH>I>DC�I=:BH:AK:H�6H�AJMJGN�EGD9J8I�8A>:CI�H:GK>8:�8DBE6C>:H�L>I=� H:8DC9=6C9�8>G8JA6I>DC�DCAN�7:>C<�E6GI� D;� I=:� H:GK>8:�� -DB:�H:8DC9=6C9�9:6A:GH�6G:�CDL�G:6A>O>C<�I=>H�6AI=DJ<=�HI>AA�6I�6C�:MEADG6I>DC�HI6<:�

2)(Increasing(brand(innovation

�AI=DJ<=� I=:�H:8DC9=6C9� AJMJGN�B6G@:I� >H�8JGG:CIAN� ;68>C<�6� ADI�D;�EG:HHJG:� >I�>H�6�<G:6I�:CIG:EG:C:JG>6A�DEEDGIJC>IN�7:86JH:�D;� I=:�B6G@:I�9DLCIJGC� >I� I6@:H�ADL�B6G@:I� >CK:HIB:CI� 6C9� 8DCHJB:GH� 9DC[I� =6K:� :;;:8I>K:�L6NH� ID� G:8:>K:�>C;DGB6I>DC���CN�7G6C9[H�>CEJIH�L>AA�<6>C�B6G@:I�:MEDHJG:�6C9�:;;:8I>K:�B6G@:I>C<��L=:C�B6G@:I�8DC9>I>DCH�>BEGDK:�

3)(Integration(of(online(and(offline(channels

.=:�8JGG:CI�IG69>C<�8=6CC:AH�;DG�I=:�H:8DC9=6C9�AJMJGN�B6G@:I�6G:�B6>CAN�7G>8@6C9BDGI6G�H=DEH�6C9�DCA>C:��.=:�:ME:G>:C8:�I=6I�7G>8@6C9BDGI6G�HIDG:H�<>K:�>H�CDI�8DBE6G67A:� ID�DCA>C:�7JI�DCA>C:�8=6CC:AH�=6H� I=:�69K6CI6<:�D;�8DCK:C>:CI�6C9�CDI�7:>C<�A>B>I:9�ID�G:<>DC�6C9�I>B:��#;�I=:H:�ILD�8=6CC:AH�>CI:<G6I:�I=>H�L>AA�8G:6I:�6� G:A6I>K:�69K6CI6<:� >BEGDK>C<� I=:�H:8DC9=6C9� AJMJGN�B6G@:I� >C9JHIGN�8=6>C�6C9�7DDHI�8DCHJB:G�H6I>H;68I>DC���CN�H>C<JA6G�8=6CC:A�L>AA�GJC�>CID�D7K>DJH�B6G@:I�9>H69K6CI6<:H� H:8DC9=6C9� AJMJGN�EGD9J8I�L:7H>I:H� HJ8=�6H�6A6N>C<�8DB� H=:=J6<DC<�8DB�6C9� AJME6>�8DB��.=:N�=6K:� I=:� H6B:� >HHJ:H�6H�DI=:G�AJMJGN�EGD9J8I�:8DBB:G8:�7JH>C:HH:H��=DL� ID�6JI=:CI>86I:�EGD9J8IH�=DL� ID�HI67>A>O:�HJEEAN�=DL�ID�<J6G6CI::�8JHIDB:G�H:GK>8:�:I8��-D�8DB7>C>C<�I=:H:�ILD�8=6CC:AH�L>AA�=6K:�>IH�8DBEA:B:CI6GN�69K6CI6<:H�6C9�B6M>B>O:�8=6CC:A�K6AJ:�

�M=>7>I� ����'6>C�.G6CH68I>DC��=6CC:AH� D;��=>C6�H�-:8DC9"6C9�&JMJGN�!DD9H�'6G@:I

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Page 85: Fortune Character China Luxury Report 2012

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4)(Authentication(and(appraisal(of(

luxury(products(will(become(more(

standardized

.=:�FJ:HI>DC�D;�=DL� ID�6JI=:CI>86I:�6C9� 6EEG6>H:� H:8DC9=6C9� AJMJGN�EGD9J8IH� >H� I=:� 7><<:HI� 8=6AA:C<:�6I�=6C9�� #I� >H�6AHD� I=:�7DIIA:C:8@� ;DG�;JGI=:G� >C9JHIGN�<GDLI=��'6>CAN�9J:�ID��=>C6[H�8JGG:CI� A68@>C<� >C� >C9JHIGN�HI6C96G9H�6C9� GJA:H�D;� 8DC9J8I� ;DG�XH:8DC9=6C9� AJMJGN� EGD9J8IHY ��X.:8=C>86AY� EGD;:HH>DC6AH� =6K:� 6�=><=:G� G:FJ>G:B:CI� HI6C96G9� 7JI�G:A6I:9�E:GHDCC:A� 6G:� =6G9� ID� ;>C9�6H� I=:N�<6>C�EG68I>8:� ;GDB� >C9JHIGN�:ME:G>:C8:��1>I=�BDG:� 6C9�BDG:�AJMJGN� EGD9J8I� 8DCHJB:GH�:CI:G>C<�

�M=>7>I�����,:<>DC��>;;:G:C8:H�>C��DCHJB:GH[�1>AA>C<C:HH�ID�I=:��M8=6C<:�D;�-:8DC9"6C9�&JMJGN�!DD9H

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The(Prosperity(of(SecondVHand(Luxury(Market(is(Correlated(to(

Economic(Development(of(the(Region

H:8DC9=6C9� IG69>C<� I=:� H:8DC9=6C9� AJMJGN�B6G@:I� >H� >C� 9:HE:G6I:�C::9� ID� :HI67A>H=� 6C� 6JI=DG>I6I>K:�AJMJGN�EGD9J8I�688G:9>I6I>DC�6<:C8N�ID�>BEGDK:� >C9JHIGN�HI6C96G9H�6C9�8D9:�D;�8DC9J8I�6AADL>C<� ;DG� I=:�H:8DC9=6C9� AJMJGN� IG69>C<� ID�BDK:� IDL6G9H�6�BDG:� G:<JA6I:9� ;6>G� 6C9� I=G>K>C<�B6G@:I�

#C�8DC8AJH>DC� I=:�H:8DC9=6C9�AJMJGN�B6G@:I� >C��=>C6� >H� HI>AA� >C� 6C� :6GAN�HI6<:�D;�9:K:ADEB:CI�L>I=�6�=J<:�<6E�7:IL::C�DK:G6AA�A:K:A�D;�DE:G6I>DC�6C9�B6C6<:B:CI� ID� >CI:GC6I>DC6A� AJMJGN�7G6C9H�L=>8=� >H�G:]:8I:9�>C�8JHIDB:G�H:GK>8:�6C9�7G6C97J>A9>C<�7JI� ;JIJG:�B6G@:I�H::H�=J<:�EDI:CI>6A�;DG�<GDLI=�

5)(FirstVtier(cities(have(the(highest(

demand( for( secondVhand( luxury(

trading

.=:G:� >H�6C�JC76A6C8:9�9:K:ADEB:CI�D;� I=:�H:8DC9=6C9� AJMJGN�B6G@:I� >C�9>;;:G:CI� G:<>DCH� >C��=>C6��-:8DC9=6C9� AJMJGN�B6G@:IH� >C� I=:�:6HI:GC�G:<>DCH�6G:�]DJG>H=>C<�8DBE6G:9�ID�I=:�'>9L:HI�G:<>DCH�� >GHII>:G�8>I>:H�=6K:�6� =><=:G�L>AA>C<C:HH� ID� HE:C9� I=6C�H:8DC9�6C9� I=>G9I>:G� 8>I>:H��'6G@:I�EGDHE:G>IN� =6H� 6� 9>G:8I� 8DGG:A6I>DC�ID� G:<>DC6A� :8DCDB>8� 9:K:ADEB:CI� � G:< >DCH � L > I= � 6 � ADL:G � A:K: A � D ;�:8DCDB>8�9:K:ADEB:CI�=6K:�6�L:6@:G�L>AA>C<C:HH� ID�HE:C9�DC�H:8DC9=6C9�AJMJGN�EGD9J8IH�

19%

37%

13%

14%

10%

5%

1%

1%

18%Beijing

Shanghai

Eastern7China

South7China

West7China

Northeast7China

North7China

Cental7China

33%

1%

1%

7%

13%

11%

16%

Willingness7to7buy Willingness7to7sell7

Page 86: Fortune Character China Luxury Report 2012

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Reasons(include:

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�>;;:G:CI�9:<G::H�D;�G:<>DC6A�DE:CC:HH�� > G H I I > : G � 8 > I > : H � 6 G : � < : C : G 6 A A N�:8DCDB>86AAN� L:AA9:K:ADE:9�L>I=� 6�=><=� 9:<G::� D;� DE:CC:HH� :6H>:G� ID�688:EI� C:L� I=>C<H� E:DEA:� =6K:� 6�7:II:G� @CDLA:9<:� D;� AJMJGN� EGD9J8IH�>C� ;>GHII>:G� 8>I>:H� 6C9� =6K:� 8=6C<:9�I=:>G� K>:LH� DC� H:8DC9=6C9� AJMJGN�EGD9J8IH� 6C9� 6G:� HI6GI>C<� ID� 688:EI�I=:B��#C�8DCIG6HI�H:8DC9�6C9�I=>G9I>:G�8>I>:H�6G:� G:A6I>K:AN� HADL� >C�:8DCDB>8�9:K:ADEB:CI� =6K:�6�<:C:G6A� A68@�D;�>C;DGB6I>DC� @CDL� A>IIA:� 67DJI� AJMJGN�E G D9J8 I H � � # C � 699 > I > DC � �= > C:H:�IG69>I>DCH�9>8I6I:�6�EG:?J9>8:�6<6>CHI�H:8DC9=6C9�<DD9H�86JH>C<�H:8DC9=6C9� AJMJGN�B6G@:IH� >C� H:8DC9�6C9�I=>G9I>:G� 8>I >:H� CDI� 6H� EDEJA6G� 6H�HDB:� H:8DC9=6C9� 9:6A:GH�B6@:�I=:B�DJI�ID�7:�

Page 87: Fortune Character China Luxury Report 2012

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Well$known)

Luxury)Brands

Converges)well$known)luxury)brands)

that)are)high$grade)and)excellent)in)quality

Discounted)Price Authentic)products)at)40$90%)off

Shopping)

Environment

Away)from)the)city,)has)convenient)public)transportation)

and)has)a)comfortable)shopping)environment.

Section(Three:(China’s(outlet(market

)JIA:IH�G:B6>C�6�IG69>I>DC6A�G:I6>A�BD9:A�I=:�DCAN�9>;;:G:C8:�>H�>IH�ADL:G�EG>8:�6C9�6� A:HHI=6CH6I>H;68IDGN� H=DEE>C<�:ME:G>:C8:��1=>A:� IG69>I>DC6A� G:I6>A�8=6CC:AH�6G:�;68>C<�B6HH>K:�8=6AA:C<:H�DJIA:IH�6G:�>C�H>B>A6G�H>IJ6I>DC��.=:� ��9D:H�CDI�6<G::�L>I=�I=:�8JGG:CI�DJIA:I�BD9JA:�;DG�AJMJGN�7G6C9H�>C�L=>8=�DJIA:IH�6G:�DE:G6I:9�DK:G�6�A6G<:�6G:6�

�M=>7>I�����'6>C��=6G68I:G>HI>8H�D;�"><=�C9�)JIA:IH

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1.(The(current(status(of(China’s(outlets

Development(speed(VVVVV(surpassing(US(in(10(years

.=:G:� 6G:� 8JGG:CIAN� I=G::� 9>;;:G:CI� INE:H� D;� DJIA:IH� >C��=>C6�� I=:�BDHI�IG69>I>DC6A� INE:� � I=:� H>BEA:� 7G6C9� 9>H8DJCI� HIDG:�� I=:�B6IJG>C<� INE:�� DJIA:IH� L>I=� ;DD9� 8DJGIH� 6C9� :CI:GI6>CB:CI� 8DCHJBEI>DC� 6G:6�� 6C9�I=:� 8DBB:G8>6AAN� >CI:<G6I:9� DJIA:IH� � N:I� I=>H� >CI:<G6I>DC� >H� 76H:9� DC�AJMJGN�7G6C9�9>H8DJCIH�6H�L:AA� 6H�9:G>K:9�C::9H� ;DG�96>AN�C:8:HH>I>:H�6C9�:CI:GI6>CB:CI���JGG:CIAN�<GDL>C<�B6G@:I� IG:C9H� ;DG� I=:� I=>G9� INE:�D;�DJIA:IH�6G:�7:8DB>C<�BDG:�B6C>;:HI�

#C�� �� I=:��:>?>C<�3�(-"��-=DEE>C<�)JIA:IH�D;\8>6AAN�DE:C:9�>IH�9DDGH��.=>H�>H��=>C6[H�\GHI�H=DEE>C<�8:CI:G� >C� I=:�;DGB�D;�DJIA:IH�B6G@>C<�I=:�7:<>CC>C<�D;�DJIA:IH�9:K:ADEB:CI�>C��=>C6���88DG9>C<�ID�86A8JA6I>DCH�76H:9�DC�EJ7A>8�HI6I>HI>8H�9DC:�7N�I=:� ���=>C6�=6H�=69�����DJIA:IH�7N��J<JHI���HI�� ���6H�L:AA�6H�����H6A:H�AD86I>DCH�H:AA>C<�9>H8DJCI:9�EGD9J8IH�>C�I=:�C6B:�D;�X)JIA:IHY��)C�I=:�DI=:G�=6C9� I=:�/C>I:9�-I6I:H� I=:�7>GI=EA68:�D;�DJIA:IH�DCAN�=DHIH�6� IDI6A�CJB7:G�D;�� �DJIA:IH�6;I:G�6ABDHI�� �N:6GH�D;�9:K:ADEB:CI�

Page 88: Fortune Character China Luxury Report 2012

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Market(positioning(VVVVV(primarily(mid(to(lowVendZ(limited(highVend(outlets

�AI=DJ<=�DJIA:IH�=6K:�7:8DB:�:MIG:B:AN� ;6B>A>6G� ID��=>C:H:�8>I>O:CH�=><=:C9�DJIA:IH� I=DH:�8ADH:HI� ID� I=:�DG><>C6A� 9:;>C>I>DC�D;�6C� XDJIA:IHY�6G:� K:GN�;:L� >C��=>C6�H=6G>C<�B:G:AN�����D;�6AA�DJIA:IH��'DHI�DJIA:IH�6G:�HI>AA�B>9� ID�ADL:C9�L=>8=�9D:H�CDI� ;>I� I=:�DG><>C6A� 9:;>C>I>DC�D;� 6C�DJIA:I��-DB:�=><=:C9�DJIA:IH�7:>C<�EDEJA6G�6BDC<��=>C:H:�8DCHJB:GH�6G:��:>?>C<�3�(-"��-=6C<=6>��6>A>6C�)JIA:IH�*A6O6��:>?>C<�-8>I:8=�.>6C?>C� ADG:CI>6�0>AA6<:��=:C<9J�.>B:H�)JIA:IH�6C9��=6C<H=6�3DJGB6GI�

�M=>7>I�����.=:��:K:ADE>C<�-E::9�D;�)JIA:IH�>C��=>C6�6C9��B:G>86

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Overflow(of(Domestic(Outlets(with(Lack(of(HighVEnd(Outlets

Country Scale(Unit:Store)

424 10 years 42

3100 years300

DevelopmentTime

Average9Annual9Outlet9Growth

(Unit:Store/Year)

China

US

High%&%end25%

Low%&%end45%

Middle%&%end30%

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Page 91: Fortune Character China Luxury Report 2012

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Page 92: Fortune Character China Luxury Report 2012

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Page 94: Fortune Character China Luxury Report 2012

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Page 96: Fortune Character China Luxury Report 2012

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Chapter FivePromotion of Luxury

Brands in China

Page 98: Fortune Character China Luxury Report 2012

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TraditionalMedia83%

New.Media17%

15%

23%

32%

5%6%

2%

Broadcasting

TV

OutdoorAdvertisement

Internet

Newspaper

Magazine

7%

10%Other.New.Media

Mobile.Media

1.(The(resource(for(Chinese(consumers(to(obtain(luxury(product(information

1)(Traditional(channels(are(still(critical

Friend(referral(shares(similar(importance(as(advertisements

#C� I=:��=>C:H:�B6G@:I�69K:GI>H:B:CIH�6G:� I=:� IG69>I>DC6A�L6N�D;�HEG:69>C<�AJMJGN� EGD9J8I� >C;DGB6I>DC�L>I=� 69K6CI6<:H�D;� 7GD69�:MEDHJG:� ID� I6G<:I�6J9>:C8:� HIGDC<�D7?:8I>K:H� 6C9�=><=� ;G:FJ:C8N�D;� EGDA>;:G6I>DC�� #I� >H� I=:�BDHI�>BEDGI6CI�HDJG8:�D;�>C;DGB6I>DC�8=6CC:A��� ���;DG��=>C:H:�8DCHJB:GH���=>C6[H�AJMJGN�B6G@:I�>H�HI>AA�6I�>IH�EG:A>B>C6GN�HI6<:�L=:G:�B6CN�8DCHJB:GH�6G:� JC;6B>A>6G�L>I=� AJMJGN� 7G6C9H���J:� ID� I=:� ADL� A:K:A� D;� AJMJGN� 7G6C9�G:8D<C>I>DC�I=:G:�=6H�7::C�A6G<:�6BDJCIH�D;�>CK:HIB:CIH�>C�69K:GI>H:B:CIH�>C� H:8DC9�6C9� I=>G9I>:G� 8>I>:H� H>C8:�69K:GI>H:B:CIH�6G:� I=:�B6>C�L6N� ;DG�8DCHJB:GH� ID� G:8D<C>O:�6�7G6C9[H�K6AJ:�� #C� I=:�86H:�L=:G:�8DCHJB:GH�6G:�JC;6B>A>6G�L>I=� I=:�7G6C9� ;G>:C9� G:;:GG6AH�7:8DB:�BDHI� >C;AJ:CI>6A� �� ��� >C�7J>A9>C<�IGJHI�>C�I=:�7G6C9�

Section(One:(Media(supports(to(luxury(brands(in(China

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Types(of(Media(that(Participated(in(the(Survey

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Page 99: Fortune Character China Luxury Report 2012

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Storefront(as(the(main(information(resource

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HighVasset(Class(Consumers(Prefer(to(Get(Information(about(Luxury(

Goods(from(Product(Brochures

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PR#Events17%

Media#Advertisements30%

Friends30%

Store13%

Product#Brochure7%

Others3%

45%

44%

43%

35%

7%

10%

18%

30%

27%

24%

17%

9%

5%

7%

7%

9%

10%

9%

9%

10%

6%

6%

6%

7%10M$and$below

Unit:RMB

10$2$50M

50$2100M

100M$and$above

Magazine Internet Product$Brochure TV Outdoor$Advertisement Newspaper

Consumers$with$assets$less$than$RMB$10M$prefer$to$receive$luxury$information$from$magazines,$internet$and$outdoor$advertisements.$Those$with$RMB$100M$and$above$on$the$other$hand,$favor$high$2$end$magazines,$products$brochures$and$use$less$of$the$internet.$

Page 100: Fortune Character China Luxury Report 2012

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6%

7%

11%

25%

15%

36%

7%

9%

8%

18%

18%

40%

Newspaper

Outdoor8Advertisements

TV

Internet

Product8Brochure

Magazine

Male Female

Magazines(and(product(brochures(are(highly(popular

'6<6O>C:H� 6G:� I=:� ;>GHI� 8=DH:C�B:9>6� ;DG� �=>C:H:� 8DCHJB:GH� >C� I:GBH� D;�G:8:>K>C<� >C;DGB6I>DC�67DJI� AJMJGN�EGD9J8IH� �������.=:� �� G:H:6G8=�H=DLH� I=6I�EGD9J8I� 7GD8=JG:H� 6G:� 7:8DB>C<�BDG:� EDEJA6G� 6BDC<�=><=� 6HH:I� 8DCHJB:G�:HE:8>6AAN�B>AA>DC6>G:H� ������ G6C@>C<� 8ADH:AN� 7:=>C9�B6<6O>C:H��.=:�B6>C�G:6HDC�;DG�I=>H�>H�9J:�ID�I=:�6<:�<GDJE�D;�B>AA>DC6>G:H���H�I=:N�6G:�B6>CAN�� �N:6GH�DA9�6C9�67DK:�6C9�=6K:� >BEG:HH>K:�86G::GH�� #C�699>I>DC� I=:>G� A68@�D;� I>B:�6C9�;6B>A>6G>IN�L>I=�I=:�>CI:GC:I�DCAN�6AADLH�I=:B�ID�7GDLH:�I=:�7G6C9[H�D;;>8>6A�L:7H>I:�

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Male(Consumers(Prefer(to(Receive(Luxury((Information(from(Magazines(

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8%7% 6% 6%

33%

41%45%

34%

13%

5%8%

3%

8%9% 9% 10%

35%

21%

15%

9%7%

16% 17%

38%

30#and#below 30,40#yo 40,50#yo 50#and#above

TV Magazine Newspaper Outdoor#Advertisement Internet Product#Brochure

Page 101: Fortune Character China Luxury Report 2012

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Internet(is(helping(viral(marketing

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2)(The(spotlight(of(social(media

Independent(media(are(becoming(opinion(leaders

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Magazine Newspaper Product3BrochureOnlineOutdoor3AdvertisementTV

42%

5%

20%

5%5%

23%

65%Searchengines

Brandwebsite

13%

Socialnetworks

!

12%

E3A3commerceplatform10%

Page 102: Fortune Character China Luxury Report 2012

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Fast(growth(in(social(media(applications

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From(passive(information(reception(to(

proactive(attention(to(personal(creation

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The(era(of(personalized(consumption(

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Page 103: Fortune Character China Luxury Report 2012

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Page 105: Fortune Character China Luxury Report 2012

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Page 108: Fortune Character China Luxury Report 2012

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1.(Reasons(why(Chinese(consumers(participate(in(luxury(brand(

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Networking

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Page 109: Fortune Character China Luxury Report 2012

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Page 110: Fortune Character China Luxury Report 2012

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Private(Event((2%

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Sale15%

Charity(Event14%

Experiential(Event12%

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Grand(Event6%

Finance(&(Economics(Forum(3%

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Page 111: Fortune Character China Luxury Report 2012

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PR#Activity#Type Advantage Disadvantage Notes

Forum#and#Lecture

Good#for#promoting#brand

and#service#to#lower?level

customers

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customer#as#it's#not

suitable#for#selling#and

servicing#high?end#ones

ones

Large#number#of#participants

Banquet

Good#for#promoting#brand

and#service#to#old

customers

No#sales#at#actual

event

Large#number#of#participantsE

generally#has#a#specific#theme#and

is#usually#sponsored#by#watch#brands

brands

Cocktail#Party

Good#for#marketing#and

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old#customers

Limited#capacity

Moderate#number#of#participantsE

relaxed#environment#(conference

is#the#most#widely#used#form)

Experiential#ActivityBest#combination#of

branding#and#marketingHigh#in#cost

Has#a#lot#of#space#and#environment

requirements

Sales#Activity Only#suitable#for#sales Very#limitedUsually#conducted#in?store

promotions

Value#Analysis#of#PR#Activities#Held#by#Luxury#Brand

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1>I=�B6CN� I:HIH� 6BDC<� I=:�L:6AI=� <GDJE� >C��=>C6� X.=G::�*:GHDC�,JA:Y� >H� ;DJC9�:BE>G>86AAN��1=:C�6�8:GI6>C�E:GHDC�=6H�EJG8=6H:9�6�7G6C9:9�EGD9J8I�6C9� A:6GCI� I=6I�I=G::� 8DCH:8JI>K:�E:GHDCH�=6K:�CDI� =:6G9�D;� I=>H� 7G6C9� =:�DG� H=:�LDJA9�9:K:ADE�6� HIGDC<�H:CH:�D;� 8DCHJBEI>DC�9>H6EED>CIB:CI�6C9�LDJA9�CDI� 8=DDH:� ID�EJG8=6H:�DG�EJG8=6H:�6<6>C�9:HE>I:� I=:�FJ6A>IN�D;� I=:�EGD9J8I��"DL:K:G� >;� I=G::�8DCH:8JI>K:�E:GHDCH�6EEGDK:�=>H�DG�=:G�H:A:8I>DC�=:�LDJA9� ;::A�6�HIGDC<�H:CH:�D;� 8DCHJBEI>DC�8DC;>9:C8:�:K:C�I=:�FJ6A>IN�D;�I=:�EGD9J8I�>H�7:ADL�6K:G6<:�

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Female(Luxury(Consumers(are(Less(Loyal(than(Male(Consumers((

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Have%bought%more%than%5%items%from%the%same%luxury%brand

Have%never%bought%more%than%5%items%from%the%same%luxury%brand

10%

90%

26%

74%Female Male

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1.(Cultural(factors

�=>C:H:�8JAIJG:�=6H�6�� �N:6G�=>HIDGN�6I�I=:�H6B:�I>B:>I�>H�6C�>CI:<G6I:9�8JAIJG:�L=>8=�=6H�7::C� >C;AJ:C8:9�7N�:MI:GC6A� 8JAIJG:H���=>C:H:�6G:�K:GN�DE:C�ID�C:L�I=>C<H�

�� G:H:6G8=�H=DLH� I=6I�����D;�8DCHJB:GH�6G:�K:GN�L>AA>C<� ID�JC9:GHI6C9�6C9�7:�:MEDH:9�ID�C:L�EGD9J8I�>C;DGB6I>DC�E6HH>DC6I:AN������D;�8DCHJB:GH�:MEG:HH�I=:�L>AA>C<C:HH�ID�68FJ6>CI�L>I=�C:L�7G6C9�6C9�EGD9J8I�>C;DGB6I>DC��)CAN����:MEG:HH:H�CD�>CI:G:HI�>C�9D>C<�HD�

�I�I=:�H6B:�I>B:�BDG:�>BEDGI6CIAN� AJMJGN�7G6C9H�=6K:�DCAN�:CI:G:9��=>C6�;DG� � � N:6GH��.=:G:;DG:��=>C:H:� 8DCHJB:GH� 6G:� CDI� ;6B>A>6G�L>I=� I=:H:�7G6C9H�6C9�BDHI�D;�I=:B�9D�CDI�=6K:�6�8A:6G�7G6C9�8DC8:EI�ID�7:�67A:�ID�I:AA�7G6C9�9>;;:G:C8:H��1=:C�8DCHJB:GH�9D�CDI�JC9:GHI6C9� I=:�7G6C9� >I� 8DJA9�9>G:8IAN� >BE68I� I=:>G� A:K:A�D;� ADN6AIN� IDL6G9H� I=:�7G6C9�6C9�86C�7:�:6H>AN�>C;AJ:C8:9�7N�:MI:GC6A� ;68IDGH�:HE:8>6AAN�69K:GI>H:B:CIH��.=>H� >H�6AHD�L=N�I=:�>CK:HIB:CI�>C�69K:GI>H:B:CIH�>C��=>C6�>H�<G:6I:G�I=6C�I=6I�>C��JGDE:�6C9�I=:�/C>I:9�-I6I:H���9K:GI>H:B:CIH�=6K:�I=:�EDL:G�ID�IG6CH;DGB�6C�JC@CDLC�7G6C9�ID�6�7G6C9�I=6I�DLCH�6�A6G<:�EDDA�D;�8DCHJB:GH�

Section(Two:(Reasons(for(low(loyalty(among(Chinese(consumers

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Chinese(Luxury(Consumers(are(Enthusiastic( in(Understanding(and(

Experiencing(New(Luxury(Brands(and(Products(

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Not$interested

Occasionallyinterested

More$willing,wouldn't$reject$$

Very$interested

1%

15%

27%

57%

!

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115 �"#(��&/2/,3�,�*),.

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Have(You(Bought(Over(5(Items(from(the(Same(Luxury(Brands?(

Which(Brand?

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2.(Economic(factors

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3.(Service(factors

.=:� �� G:H:6G8=� H=DLH� I=6I��=>C6[H� 8JGG:CI� AJMJGN� 8DCHJB:GH� :MEG:HH�=><=�<:C:G6A� H6I>H;68I>DC� ;DG� I=:�6;I:G� H6A:H�H:GK>8:H� ��������BDC<� I=:B�I=:�B6?DG>IN�D;�B>AA>DC6>G:H�L=D�DLC�DK:G�,'��� �B>AA>DC�=6K:�:MEG:HH:9�XK:GN�H6I>H;>:9Y� ������6C9�XG:A6I>K:AN�H6I>H;>:9Y� ��������DCHJB:GH�L=D�DLC�,'��� �B>AA>DC�6C9�7:ADL�=6K:�:MEG:HH:9�ADL:G�H6I>H;68I>DC�A:K:AH�IDL6G9H�7G6C9�6;I:GH6A:H�H:GK>8:H��'DHI�D;� I=:B�6HH:HH:9� XBDHIAN�H6I>H;>:9Y� ������6C9� XCDI�H6I>H;>:9Y� �� ����'6A:�8DCHJB:GH�:MEG:HH:9�6�=><=:G�H6I>H;68I>DC�G6I:� ������ ;:B6A:� 8DCHJB:GH�:MEG:HH:9� XG:A6I>K:AN� H6I>H;>:9Y� ������6C9�XBDHIAN�H6I>H;>:9Y�������I=:G:�>H�6AHD�6�<GDJE�D;�LDB:C�L=D�:MEG:HH:9�XK:GN�9>HH6I>H;>:9Y��������.=>H�H=DLH�I=6I�;:B6A:�8DCHJB:GH�86G:�BDG:�67DJI�I=:�EGD9J8I�H:GK>8:�:ME:G>:C8:�6H�I=:N�=6K:�6�HIGDC<:G�H:CHJ6A�6HE:8I�6C9�6G:�BDG:�H:CH>I>K:� ID�H:GK>8:�� #C�699>I>DC� ;:B6A:�8DCHJB:GH�:ME:8I� ID� G:8:>K:�H6I>H;68I>DC�9JG>C<� I=:�:CI>G:�EGD8:HH� ;GDB�EJG8=6H>C<� I=:�EGD9J8I� ID� I=:�6;I:GH6A:H�H:GK>8:�

Luxury&Brands&with&the&Highest&Rate&of&Repurchase

Clearly&stated&4brands&21%

24%

Clearly&stated&1&=&3brands

Clearly&stated&5brands

46%

Did&not&fill&out&9%

Page 119: Fortune Character China Luxury Report 2012

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Consumers(with(Higher(Assets(are(More(Satisfied(with(the(AfterVSales(

Services(from(Luxury(Brands

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Over(90%(of(Consumers(are(Satisfied(with(AfterVSales(Services(in(China

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Very%Satisfied32%

Relatively%Satisfied

31%

Mostly%Satisfied30%

Not%Satisfied7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Less/than/10M/

10/5/50M

50/5/100M

Over/100M

Very/Satisfied Mostly/Satisfied Relatively/Satisfied Not/SatisfiedUnit:/RMB

56% 26% 15% 3%

13%

30%

36%

35%

28%

29%

42%

34%

31%

10%

8%

4%

Page 120: Fortune Character China Luxury Report 2012

117 �"#(��&/2/,3�,�*),.

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8%

26%

28%

38%

13%

32%

35%

20%

NotSatisfied

RelativelySatisfied

MostlySatisfied

VerySatisfied

Female Male

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Male(Consumers(are(More(Likely(to(be(Satisfied(than(Female(Consumers((

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The("PostV80s"(Have(the(Lowest(Satisfaction(Level(for(AfterVSales(

Service(of(Luxury(Brands

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7%

26%

44% 45%33%

30%

32% 33%37%

39%

20% 19%23%

5% 4% 3%

20#$#30#yo 30#$#40#yo 40#$#50#yo Above#50

Not#Satisfied

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Mostly#Satisfied

Very#Satisfied

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Page 121: Fortune Character China Luxury Report 2012

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Consumers(in(Tier(2/3(Cities(are(More(Satisfied(with(AfterVSales(Service(

from(Luxury(Brands(

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0%

10%

20%

30%

40%

50%

60%

Very-Satisfied Mostly-Satisfied Relatively-Satisfied

Tier-1-cities

Not-Satisfied

51%

7%

38%

25%

45%

21%

10%

3%

Tier-2/3-cities

Page 122: Fortune Character China Luxury Report 2012

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4.(Channel(factors

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Over(90%(Consumers(have(Expressed(that(They(Would(Not(Purchase(

Luxury(Goods(with(Lots(of(Counterfeits(on(the(Market(

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Higher(Asset(Consumers(Have(Stronger(Feelings(against(Buying(

Luxury(Brand(with(a(Lot(of(Counterfeits(on(the(Market(

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No

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77%

85%89%

93%

23%

15%11%

7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less/than/10M 10/5/50M 50/5/100M Over/100M

Would/not/buy/products/with/a/lot/of/counterfeits

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Unit:/RMB

Page 123: Fortune Character China Luxury Report 2012

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5.(Advertisement(factors

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Page 124: Fortune Character China Luxury Report 2012

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Complaint(No.(1:(the(missing(of(discount(sales(seasons

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Section(Three:(Main(complaints(among(Chinese(consumers(about(the(services(from(luxury(brands(in(China

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Page 125: Fortune Character China Luxury Report 2012

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Complaint(No.2:( limited(access( to(

maintenance(locations

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Complaint(No.( 3:( lack( of(product(

return(guarantee

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Complaint(No.(4:(high(and(unbearable(

maintenance(costs

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Complaint(No.(5:(long(maintenance(time

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Complaint(No.(6:( incomprehensible(

product(description

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Complaint(No.(8:(unequal(treatment

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Page 126: Fortune Character China Luxury Report 2012

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Chapter SevenA Long Way to Go for Chinese Local Luxury Brands

Page 127: Fortune Character China Luxury Report 2012

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Appendix(1:(

Research(Audience–(3,754(Chinese(Consumers

.=:�� ����=>C6�&JMJGN�,:EDGI� 8DC9J8I:9� G:H:6G8=�L>I=������=><=6HH:I�8DCHJB:GH�6C9�:MEADG:9� >C9:EI=�DC� I=:�EJG8=6H>C<�7:=6K>DG�6H�L:AA� 6H�8DCHJBEI>DC�K6AJ:H�D;��=>C:H:�L:6AI=N�

.=>H� G:H:6G8=�8DK:GH��=>C6[H�BDHI� >BEDGI6CI� AJMJGN�8DCHJBEI>DC�B6G@:IH�>C8AJ9>C<��:>?>C<�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�CDGI=:GC�G:<>DC�-=6C<=6>�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�:6HI:GC�G:<>DC�&>6DC>C<�EGDK>C8:�G:EG:H:CI>C<�I=:�CDGI=:6HI:GC�G:<>DC�"J7:>�EGDK>C8:�G:EG:H:CI>C<�I=:�B>99A:�G:<>DC�!J6C<9DC<�EGDK>C8:� G:EG:H:CI>C<� I=:�HDJI=:GC� G:<>DC�->8=J6C�EGDK>C8:� G:EG:H:CI>C<�I=:�HDJI=L:HI:GC�G:<>DC�6C9�2>C?>6C<�/N<JG�6JIDCDBDJH�G:<>DC�G:EG:H:CI>C<�I=:.=>H�G:H:6G8=�8DK:GH��=>C6[H�BDHI� >BEDGI6CI� AJMJGN�8DCHJBEI>DC�B6G@:IH�>C8AJ9>C<��:>?>C<�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�CDGI=:GC�G:<>DC�-=6C<=6>�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�:6HI:GC�G:<>DC�&>6DC>C<�EGDK>C8:�G:EG:H:CI>C<�I=:�CDGI=:6HI:GC�G:<>DC�"J7:>�EGDK>C8:�G:EG:H:CI>C<�I=:�B>99A:�G:<>DC�!J6C<9DC<�EGDK>C8:�G:EG:H:CI>C<� I=:�HDJI=:GC�G:<>DC�->8=J6C�EGDK>C8:�G:EG:H:CI>C<� I=:�HDJI=L:HI:GC�G:<>DC�6C9�2>C?>6C<�/N<JG�6JIDCDBDJH�G:<>DC�G:EG:H:CI>C<� I=:�CDGI=L:HI:GC�G:<>DC���BDC<�8DCHJB:GH�7:>C<�HJGK:N:9�I=:�G6I>D�HEG:69H�

�EE:C9>M����HH:IH��>HIG>7JI>DC�D;��=>C6�H�&JMJGN��DCHJB:GH

Assets(Distribution(in(2012(–(China(Luxury(Report((((Unit:RMB)

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE(DI:��6HH:IH�>C�I=>H�G:EDGIH�G:;:G�ID�86H=�DG�86H=�:FJ>K6A:CIH�>C8AJ9>C<�8DBE6CN�6HH:IH�G:6A�:HI6I:�HID8@H�?:LA:GN�6JIDBD7>A:H�L6I8=:H�6GILDG@�6C9�8DAA:8I>7A:H�:I8�

Under&10M32%

10&*&50M50&*&100M

100&*&500M

Over&500M

33%

Over&50M35%

13%

12%

10%

Page 135: Fortune Character China Luxury Report 2012

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.=>H� G:H:6G8=�8DK:GH��=>C6[H�BDHI� >BEDGI6CI� AJMJGN�8DCHJBEI>DC�B6G@:IH�>C8AJ9>C<��:>?>C<�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�CDGI=:GC�G:<>DC�-=6C<=6>�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�:6HI:GC�G:<>DC�&>6DC>C<�EGDK>C8:�G:EG:H:CI>C<�I=:�CDGI=:6HI:GC�G:<>DC�"J7:>�EGDK>C8:�G:EG:H:CI>C<�I=:�B>99A:�G:<>DC�!J6C<9DC<�EGDK>C8:� G:EG:H:CI>C<� I=:�HDJI=:GC� G:<>DC�->8=J6C�EGDK>C8:� G:EG:H:CI>C<�I=:�HDJI=L:HI:GC�G:<>DC�6C9�2>C?>6C<�/N<JG�6JIDCDBDJH�G:<>DC�G:EG:H:CI>C<�I=:.=>H�G:H:6G8=�8DK:GH��=>C6[H�BDHI� >BEDGI6CI� AJMJGN�8DCHJBEI>DC�B6G@:IH�>C8AJ9>C<��:>?>C<�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�CDGI=:GC�G:<>DC�-=6C<=6>�6H�I=:�G:EG:H:CI6I>K:�8>IN�;DG�I=:�:6HI:GC�G:<>DC�&>6DC>C<�EGDK>C8:�G:EG:H:CI>C<�I=:�CDGI=:6HI:GC�G:<>DC�"J7:>�EGDK>C8:�G:EG:H:CI>C<�I=:�B>99A:�G:<>DC�!J6C<9DC<�EGDK>C8:�G:EG:H:CI>C<� I=:�HDJI=:GC�G:<>DC�->8=J6C�EGDK>C8:�G:EG:H:CI>C<� I=:�HDJI=L:HI:GC�G:<>DC�6C9�2>C?>6C<�/N<JG�6JIDCDBDJH�G:<>DC�G:EG:H:CI>C<� I=:�CDGI=L:HI:GC� G:<>DC���BDC<�8DCHJB:GH�7:>C<�HJGK:N:9� I=:� G6I>D�HEG:69H�DJI�:K:CAN�ID�������;DG� I=DH:�L=D�DLC�A:HH�I=6C�,'��� �B>AA>DC��G:<JA6G�6HH:I�<GDJE�� I=DH:�L=D�DLC�7:IL::C�,'��� �B>AA>DC�ID�,'��� �B>AA>DC��=><=6HH:I�<GDJE��6C9�I=DH:�L=D�DLC�67DK:�,'��� �B>AA>DC��JAIG6=><=�6HH:I�<GDJE��

.D�8DC9J8I� >C9:EI=�6C6ANH>H�DC� I=:�8DCHJBEI>DC�8=6G68I:G>HI>8H�D;� I=:�JAIG6=><=�6HH:I�<GDJE�6C9�8DBE6G:�I=>H�<GDJE�L>I=�I=:�6K:G6<:�6HH:I�<GDJE�6C9�=><=�6HH:I�<GDJE� I=>H�G:EDGI�86I:<DG>O:9�I=DH:�L>I=�DK:G�,'��� �B>AA>DC� >CID� I=G::�A:K:AH��I=DH:�L>I=�,'��� �B>AA>DC�ID�,'��� �7>AA>DC��������I=DH:�L>I=�,'��� �W�� �B>AA>DC��������6C9�I=DH:�L>I=�DK:G�,'��� �B>AA>DC��� ���

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Consumers(with(assets(less(than(10(million(RMB(

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE

2%

5%

15%

58%

16%

3%1%

Ph.D%

EMBA

MBA

Master

Bachelor

Junior%college

Under%junior%college

50%

34%

14%2%

0%10%20%30%40%50%60%

20B30%yo 30B40%yo 40B50%yo Above%50

Female%51%

Male49%

36%

64%

FirstBtier%cities SecondBtier%cities

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Research(targets(V(V(luxury(goods(consumers(owning(high(personal(assets(

(RMB(10(million(to(RMB(50(million)

T��9J86I>DC�768@<GDJC9��9DB>C6I:9�7N�I=DH:�L>I=�JC9:G<G69J6I:�9:<G::H�������8DBE6G:9�ID�6K:G6<:�6HH:I�<GDJE� I=DH:�L>I=�<G69J6I:�9:<G::H������� >H� A:HH�7JI�BDG:�6G:�L>I=�'���6C9��'���9:<G::H������

T��<:�9>HIG>7JI>DC��B6>CAN�� � �N:6GH�DA9��EDHI�� H��6C9�� � �N:6G�DA9H��EDHI�� H��L>I=�����6C9�����G:HE:8I>K:AN��EG>B6G>AN�9DB>C6I:9�7N�NDJC<�ID�B>96<:9�8DCHJB:GH

T�!:C9:G� G6I>D��'6A:� 8DCHJB:GH� 9DB>C6I:H� ������ ;DGB>C<�6� ������ G6I>D�8DBE6G:9�ID�;:B6A:�8DCHJB:GH

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Consumers(with(assets(between(10(V(50(million(RMB(

�6I6�-DJG8:� DGIJC:��=6G68I:G�!GDJE

First&tier(cities Second&tier(cities6%

15%

47%

13%

11%

7%1%

Ph.D(

EMBA

MBA

Master

Bachelor

Junior(college

Under(junior(college

12%

42% 43%

3%0%

10%

20%

30%

40%

50%

20&30(yo 30 &40(yo 40 &50(yo Above(50

Female29%

Male71%

47%53%

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Appendix(4(Characteristics(of(Luxury(Consumers(with(Hyper(Assets

Consumers(with(assets(over(50(million(RMB(

Data(Source:Fortune(Character(Group

Research(targets(V(V( luxury(goods(consumers(owning(ultraVhigh(personal(

assets((RMB(50(million(or(above)

T� ��9J86I>DC�768@<GDJC9�� ADL:G�E:G8:CI6<:�D;� I=DH:�L>I=��68=:ADGH�9:<G::�������8DBE6G:9�ID�6K:G6<:�6C9�=><=�6HH:I�<GDJE��JAIG6=><=�E:GHDC6A�6HH:IH�8DCHJB:GH[�:9J86I>DC�768@<GDJC9H�6G:�JHJ6AAN�9>K>9:9�>CID�ILD�EDA6G�:MIG:B:H�����8DCHJB:GH�=6K:�768@<GDJC9H�ADL:G�I=6C��68=:ADGH�����8DCHJB:GH�=6K:�'���DG��'���9:<G::H����8DCHJB:GH�=6K:�'6HI:GH�DG��D8IDG6I:�9:<G::H�

T���<:�9>HIG>7JI>DC��9DB>C6I:9�7N�I=:���� H�<:C:G6I>DC�������EDHI�� H�6C9�EDHI�� H�<:C:G6I>DCH�:68=�I6@:�� ��

T� �!:C9:G� G6I>D��->B>A6G� ID� I=:�=><=6HH:I� AJMJGN�<DD9H� 8DCHJB:G�<GDJE�9DB>C6I:9�7N�B6A:H�������6�����G6I>D�8DBE6G:9�ID�;:B6A:H�

T� ��>IN�D;� G:H>9:C8:��,:H:6G8=�6J9>:C8:�:K:CAN�9>HIG>7JI:9�7:IL::C� ;>GHI�6C9�H:8DC9I>:G:9�8>I>:H�

10%

16%

38%

7%

12%

14%

3%Ph.D%

EMBA

MBA

Master

Bachelor

Junior%college

Under%junior%college

3%

24%

54%

19%

0%10%20%30%40%50%60%

20B30%yo 30B40%yo 40B50%yo Above%50

Female33%

Male67%

50% 50%

FirstBtier%cities SecondBtier%cities

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Appendix5(Characteristics(of(236(Brand(Heads

Appendix(2:(Research(targets(–(236(managers(of(Luxury(Brands

T��9J86I>DC�768@<GDJC9��=><=AN�:9J86I:9�BDHIAN�=DA9�=><=�9:<G::H�BDHIAN��68=:ADGH�������� ��=6H�B6HI:GH�9:<G::

T� ��<:�9>HIG>7JI>DC������6G:�7:IL::C�� � �N:6GH�DA9� �EDHI� H�<:C:G6I>DC��6CDI=:G�����6G:�7:IL::C�� � �N:6GH�DA9

T�!:C9:G�G6I>D��;:B6A:H�������:M8::9�B6A:H������

T��>IN� D;� G:H>9:C8:�� ����8DB:� ;GDB��:>?>C<�-=6C<=6>�!J6C<O=DJ� 6C9�-=:CO=:C��I=:�;DJG�A6G<:�I>:GDC:�8>I>:H�

T� � >C6C8>6A�H>IJ6I>DC��9DB>C6I:9�7N� I=DH:�L=D�DLC�,'����B>AA>DC� ID�,'����B>AA>DC�������DCAN�����D;�I=DH:�L>I=�A:HH�I=6C�,'����B>AA>DC

20%

68%

12%Less$than$Undergraduate

Undergraduate

Graduate$(Masters/MBA/EMBA/Phd)

17%

52%

31%

0%

10%

20%

30%

40%

50%

60%

10M$and$below 10C50$M 50M$and$above

Unit:RMB9%

51%

32%

8%

0%

10%

20%

30%

40%

50%

60%

20C30$yo 30C40$yo 40C50$yo 50$and$above

75%

25%

Male44%

Female56%

FirstCtier$cities SecondCtier$cities

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Appendix( 3:(Research( targets( –( 217(directors( of(media( and(

advertising(companies

T��9J86I>DC�768@<GDJC9��=><=�:9J86I>DC�9DB>C6I:9�7N��68=:ADG[H�9:<G::�����������DLCH�6�'6HI:G[H�9:<G::

T��<:�9>HIG>7JI>DC��6ABDHI�=6A;�6G:�7:IL::C�� � �N:6GH�DA9��EDHI�� H�<:C:G6I>DC��I=:�DI=:G�����6G:�7:IL::C�� � �N:6GH�DA9

T�!:C9:G�G6I>D�� :B6A:�6C9�B6A:�G6I>D�6ABDHI�:FJ6A�L>I=� ;:B6A:H�������6�7>I�ADL:G�I=6C�B6A:H������

T��>IN�D;� G:H>9:C8:������8DB:H� ;GDB��:>?>C<�-=6C<=6>�!J6C<O=DJ�6C9�-=:CO=:C��I=:�;DJG�A6G<:�I>:GDC:�8>I>:H�

T� >C6C8>6A�H>IJ6I>DC��BDHI�DLC�A:HH�I=6C�,'����B>AA>DC�������L>I=�;:L�DLC>C<�DK:G�,'����B>AA>DC��� ��

�DENG><=I�HI6I:B:CI��.=:�� ����=>C6�&JMJGN�,:EDGI�JH:H�96I6�DG><>C6I>C<�;GDB�H>C<A:HJ7?:8I�G:H:6G8=�6C9�EJ7A>8>O:9�B6I:G>6AH��*:GHE:8I>K:H�6C9�8DC8AJH>DCH�D;�I=>H�G:EDGI�6G:�76H:9�DC�6C6ANH>H�D;�I=:�96I6�B:CI>DC:9�67DK:��.=:�8DENG><=I�D;�6AA�8DCI:CIH�6C9�8=6GIH�7:ADC<�ID� ��6C9�6G:�EGDI:8I:9�7N�I=:��=>C:H:� A6L�6C9� >CI:AA:8IJ6A�EGDE:GIN� A6LH���CN�DG<6C>O6I>DCH�DG� >C9>K>9J6AH�B6N�CDI�JH:�8DCI:CIH�D;�I=>H�G:EDGI�;DG�6CN�8DBB:G8>6A�EJGEDH:H�L>I=DJI�I=:�LG>II:C�8DCH:CI�7N�I=:� ���,:EG>CIH�BJHI�6AHD�8A6G>;N�I=:�HDJG8:�D;�DJIA:IH�

11%

54%

35%Graduate(Master/MBA/EMBA/Phd)

Undergraduate

Less6than6undergraduate

44%36%

20%

0%5%10%15%20%25%30%35%40%45%50%

10M6and6below 10B506M 50M6and6above

Unit:RMB8%

49%

31%

12%

0%

10%

20%

30%

40%

50%

60%

20B306yo 30B406yo 40B506yo 506and6above

56%

44%

First -tier cities Second- tier cities

Female48%

Male52%

�"�*.�,�-�0�(�**�(�#2

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Fortune(Character(Institute

DGIJC:��=6G68I:G� #CHI>IJI:� �#�� >H�6��=>C:H:�A:69>C<�G:H:6G8=�DG<6C>O6I>DC�DC��=>C:H:�:A>I:�A>;:HINA:�EGD;:HH>DC6A�IG6>C>C<�6C9�8DCHJAI6C8N���D6HI>C<�6C�:ME:GI�I:6B�L>I=� I=>GINILD�G:H:6G8=:GH�6C9� A:8IJG:GH� >C� I=:� AJMJGN� >C9JHIGN� �#�=6H�>HHJ:9�\K:�G:EDGIH�DC��=>C:H:�:A>I:�A>;:HINA:�>C�� ���6C9�EA6CH�ID�>HHJ:�I=>GI::C�G:EDGIH� >C�� ����1>I=�6C�69K6CI6<:DJH�96I676H:�6C9�EGD;:HH>DC6A�6C6ANH>H�DC�I=:�AJMJGN�B6G@:I� DGIJC:��=6G68I:G�G:EDGIH�6C9�L>I=� >IH��=>C6�&JMJGN�,:EDGI�>C�E6GI>8JA6G�6G:�7GD69AN�JH:9�6BDC<�AJMJGN�7G6C9H�<DK:GCB:CI�DG<6C>O6I>DCH�6C9�B:9>6�� �#�>H�CDL��=>C6[H�A6G<:HI�96I6�EGDK>9:G�>C�I:GBH�D;�AJMJGN�7G6C9�6C9�B:9>6�L>I=�HIG6I:<>8�8DCC:8I>DCH�L>I=�DK:G�� �B:9>6�C6B:H�LDGA9L>9:��

Fortune(Character(Group

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Page 143: Fortune Character China Luxury Report 2012
Page 144: Fortune Character China Luxury Report 2012