Cashmere Luxury Nuggets Emerging Market

"By 2015, China's luxury goods market will maintain an annual growth rate of 18%, and will occupy 20% of the world.

As an important category of luxury goods, cashmere, which is known as "diamond in fiber" and "soft gold", has attracted much attention.

In the view of luxury brand manufacturers in Italy, China is the representative.

Increasingly prosperous Chinese luxury market

"The growth rate of cashmere luxury market will accelerate in 2012, and the optimistic growth trend will continue in the next few years, especially in the Chinese market."

Maurizio Castro, partner of Italy KPMG Consulting Co. Ltd., said at the 2011 International cashmere exchange conference in Beijing.

"China has gradually become the fastest growing and most potential luxury consumer center in the world."

Lai Shiping, chief representative of Italy Foreign Trade Commission, bluntly said.

Although the economic crisis in 2009 reduced the demand for luxury goods worldwide, it began to rise slightly in 2010, especially in the Chinese market.

After more than 30 years of development, China's cashmere products market has gradually become one of the world's largest markets for cashmere products.

Since 2005, the scale of the domestic consumer market has increased by more than 15% per annum. At present, the size of the market is about 15 million, and it continues to grow at a faster rate.

The McKinsey report points out that the most famous brands that will occupy China's luxury market in 2015 will include Hermes, LV, Ferragamo, Zegna and so on.

Piergiorgio Dasan, chairman of PGDS consulting company in Milan, Italy, also believes that there is no shortage of cashmere luxuries in the Chinese market: a rapidly growing economy; more and more Chinese customers understand luxury brands, many of which are younger and more gold; Chinese people have a complex love for their rivals, and are willing to pursue genuine brands.

Many factors make China gradually become a luxury consumption center.

"Of course, other emerging markets, including Brazil, Russia and the Middle East countries, also have larger cashmere consumption potential."

Xiong Xiaokun, a light industry researcher at CIC, pointed out.

Specifically, Russia's demand for cashmere rose slightly in 2010 ~2011, and its coat and formal dress were welcomed.

The Brazil market is still immature, but there will be great opportunities in the future.

Influenced by the economic crisis in the past three years, the consumption of traditional cashmere consuming countries tends to be stable.

In the more mature markets in Europe and the United States, the overall demand for cashmere consumption has not increased and has been unchanged from the past.

At present, the world's largest cashmere consumption is the United States, followed by the United Kingdom, Japan, Western Europe and China.

Among them, the traditional luxury consumption market in developed countries has about 150 million consumers, with a total turnover of US $207 billion, occupying 90% of total consumption.

Castro disclosed that before the financial crisis, the main market of the company was the United States.

Now, its investment has accelerated to "China, South Korea and the Chinese preferred destination". "Market stability is the result of our view. Besides China, other markets, such as Germany and Russia, are developing, and I hope that South Korea and Japan will also be able to recover a little."

Risks and uncertainties remain

Despite the exciting prospects for the luxury market, some risks and uncertainties remain a stumbling block along the way.

First is the rising price of raw materials.

Goat breeding is closely related to ecosystem vulnerability. As the pressure of environmental protection increases, as the world's largest cashmere supplier, China's future cashmere raw material output may decline.

Foreign luxury goods manufacturers are beginning to worry about possible shortage of raw materials in the future. "If cashmere prices go up too high, we intend to study and use alternative materials, such as super 210 fiber, real silk cashmere fabric, cashmere / linen blended fabric, etc."

Castro said.

Castro also pointed out that technical improvement can only meet the shortage of raw materials. Now the latest equipment has been able to achieve 96%~98% processing rate for cashmere.

What worries the cashmere manufacturers is the global recession.

Turning to the consequences, Castro said: "corporate layoffs will bring a shortage of skilled labor, which is a fatal blow to us.

Secondly, in order to win the market, our products are implemented by excessive sales and business expansion policies, and our products become products that are readily available. As luxury goods, we have to be at the top channel.