Hong Kong Circle: Hong Kong Economic and Trade Office in Washington D.C. Newsletter

Luxury Brands' Window to Mainland China

The new Gucci flagship store in The Landmark, Central, one of the great shopping districts of the world; and Paul Husband, author and retail consultant

Hong Kong is increasingly the place to showcase international luxury brands.

The line-up of prestigious brand names positioning themselves in Hong Kong reads like a who's who of style, with Hong Kong now boasting more stores per luxury brand than London, New York or Paris.

The city also has the largest stores of luxury brands outside Japan. In upmarket mega-malls across Central, the Hong Kong flagships of Giorgio Armani, Louis Vuitton, Chanel, Gucci, Dior and Prada rank amongst the six largest in the world.

Luxury "in abundance" is attracting both brand names and shoppers alike to Hong Kong, said Paul Husband, Managing Director of Husband Retail Consulting Ltd.

"The city offers luxury in every type of setting, from the streetscape of Central - one of the great shopping districts of the world - to world-class hotels such as The Peninsula, and mega malls such as Harbour City and Pacific Place."

Mr. Husband commented that shoppers are drawn by the huge number of brands, both established brands and new market entrants like Valextra from Milan, Asprey from London, Brioni from Italy and H&M from Sweden.

Hong Kong's retail prestige was also the reason Asprey - billed as "the ultimate authentic British lifestyle house" - opened a store in The Peninsula Hotel shopping arcade as part of the brand's international expansion.

Mainland China Showcase

Brands also use their Hong Kong presence as a showcase to Mainland China.

According to KPMG, in 1999 a "relatively low" US$6 million was needed to rank among Forbes Magazine's "50 Richest People in China." In 2005, however, the figure shot up to US$140 million to gain a place in the top 100.

A newly released KPMG report on luxury brands in Mainland China shows that consumer demand for luxury is spreading.

"Interestingly, the appetite for luxury brands is not restricted to the more established cities such as Beijing, Shanghai and Guangzhou," said Mark Larson, KPMG's Global Head of Retail. "The survey findings show that brand awareness and desire for luxury brands in the second-tier cities is similar to the primary cities."

Paul Husband, author of new book, "The Cult of the Luxury Brand," said the sheer number of visitors to Hong Kong makes the city the ideal showcase for brands.

"With China now responsible for over 15 million visitors to Hong Kong annually, it is a true test market and marketing opportunity for luxury brands entering or expanding in the Mainland."

Husband Retail Consulting Ltd: www.husband-retail.com/

KPMG: www.kpmg.com/

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