Growing purchasing power of Chinese consumers has lured an increasing number of world's well-known luxury brands to set up more outlets in the country.
Gianni Versace SpA, the world's prestigious clothier named after its late founder Gianni Versace said it would invest about 10 million euro (US$13 million) to open nine stores in China next year to quench the shoppers' thirst for classic Italian fashions.
The family-run high-end fashion house will open seven stores on the mainland, one in Hong Kong and another in Macao, Giancarlo Di Risio, group chief executive, announced.
"It is a huge sum which accounts for about 40 per cent of our total investment," said Di Risio, "Encouraged by our current stores' performance, we have decided to make this important investment plan."
Versace has been present in Asia for some 12 years and currently has one store in Beijing, one in Shanghai and three in Hong Kong.
The company gave no China sales figures and said that the firm's Chinese stores were only five out of its total 80 flagship stores in the world.
Donatella Versace, the company's vice-president and creative director, said she was confident the company's designs would suit the tastes of rich, modern Chinese.
A must-enter market
Growing luxury consumer power in Hong Kong and the mainland has already lured many foreign brands.
"Chinese people swarm to Europe for luxury goods. I can't see any reason why any European luxury brand cannot set up outlets in China," said Dror Marom, regional manager of Dalumi Diamond, an Israel diamond trader.
Marom told China Daily that the Israel classic diamond has very good sales performance in China, where people's desire for the "status symbol" is increasing.
"In recent years, more and more customers are looking for bigger and more precious diamonds than before," said Marom.
"Increasing domestic income has made shoppers looking for options to spend money, and more diversified social events allow them to have more opportunities to display luxurious items as status symbols," he said.
Versace will first open three fancy outlets respectively in Chengdu, Beijing and Shanghai, and the rest in other major cities, location of which has not yet been decided.
Donatella Versace said she was confident the company, founded in 1978 by her brother, would offer "a more contemporary, modern" designs that would attract Chinese customers.
She noted that the group, primarily targeting young clients through the Versace Jeans Couture line,has 20 franchises in China out of a total of 30 stores in the world.
The number of franchises should go up to more than 30 in China in 2007, according to the company's plan.
The world's prestigious clothiers strutting their way onto the catwalks of China also provide good opportunities for the domestic fashion industry to learn from the advanced experience of their overseas counterparts, analysts said.
Foreign businesses, such as Gianfranco Ferre and Dunhill, have done a better job in the Chinese market by setting up distribution outlets and bringing in well-known names.
"China's fashion industry is yet to have its own brand that is known worldwide. The incoming famous fashion houses are good opportunities for them to learn from the advanced experience of their overseas counterparts," an analyst said.
