China set to be world's biggest luxury market
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"Customers on the Chinese mainland have much higher enthusiasm in purchasing luxury than in other places," Ivan Tong, chairman of Sparkle Roll company, one of the main luxury distributors in mainland, said in a recent interview with Xinhua.
Sparkle Roll, a Hong Kong-based company, was previously engaged in comics and animation development, but it has evolved into a distributor for top luxury goods through acquisition of an automobile dealership in 2008, eying the potential of the luxury markets on the mainland.
Besides automobiles, Sparkle Roll has diversified its business to include distributorship of top tier watches, jewelry and red wines as well.
The company's turnover soared nearly 100 percent from a year earlier to HK$1.2 billion (US$154 million) in the fiscal year ended March 31.
Tong credited his company's stellar performance to the "fast economic development of China and a growing number of newly rich people."
Luxury car Bentley costs 3.5 million to 7 million yuan (US$500,000 to US$1 millions) on average. Now one in every 10 Bentley is sold on the Chinese mainland. It's almost the same with Rolls-Royce and Lamborghini.
DeLa Cour BiTourbillon Watches, from Swiss luxury watch brand deLa Cour, entered the mainland in January and it was not long before a deal worth HK$4.2 million was sealed with a client.
A report on China's commercial development 2009-2010 released in Beijing in May said China is set to rank as the world's biggest market for luxury goods in five years.
Written by the Chinese Academy of Social Sciences, the report said China's luxury goods market had increased to US$9.4 billion last year, accounting for 27.5 percent of the world's luxury goods market and replacing the United States as the world's second largest luxury goods market, second only to Japan.
In five years, the market for luxury goods in China could reach US$14.6 billion, becoming the largest in the world, the report said.
"Over 30 years of economic reform since 1978 have benefited the Chinese people, creating many billionaires," said Tong. What's more, "most of the rich people in China were not affected by the global financial tsunami because the renminbi is not convertible," Tong said.
Tong said he was once told by a businessman who was familiar with the global luxury industry that China's fast development and growth in luxury was impressive.
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