The luxury market is on a downturn in China — down to only about 2 percent growth —but that doesn't mean brands and retailers should forget about doing business in China.
In his new Forbes column, Tompkins International's Michael Zakkour explains that while the premium luxury market has definitely slowed, it will pick up again soon. Zakkour also believes it may grow even faster in the next 10 years because of the established luxury demographic and the fact that millions more potential buyers are coming online.
But you are probably wondering what spiked this downturn in the first place, aren't you? There are so many different reasons. For one, online sales growth has surged product values down for many of the previously highly desirable brands. Chinese luxury customers are also focusing on spending their extra income on other items, such as lifestyle products (in addition to products for social status).
I encourage you to read Zakkour's column, where you will find the full explanation of how the Chinese market has swayed, and also why companies shouldn't make any major moves to stop conducting business in China. It's not about jumping ship, but rather reconstructing both your short-term and long-term strategy for growth.
Has this downturn in China affected your company? Has your organization needed to readjust its China strategy? Leave me a comment or let me know on Twitter (@jimtompkins).