Headline August 23, 2018/ '' ' *CHINA'S STUDENTS* = RICH & SPENDTHRIFT' ''

'' ' *CHINA'S STUDENTS* = 

RICH & SPENDTHRIFT' ''

GLOBAL LUXURY BRANDS from Prada to LVMH are investing in China for the first time since a crackdown on............

Conspicuous spending five years ago - Focusing on smaller, less developed cities even as the world's second largest economy slows.

Increasing spend by cash-rich Chinese millennials,, largely unhindered by a crackdown on corruption and extravagant spending, is prompting brands to revamp some stores and open new ones in second -and third-tier where luxury spending is growing faster.

The youngsters/students, who account for around 30 percent of the sector's China sales, are a demographic less sensitive to wider economic factors, executives said.

''There is the emergence in China of a very strong upper class or upper middle-class,'' Jean Paul Agon, Chairman and CEO of cosmetics groups LÓreal (OREP.PA) said on a call with analysts. ''And the difference is that now millennials from this middle upper class are absolutely not hesitant to buy luxury brands.''

Often single children armed with family money, the 20-34 year-old demographic started buying luxury brands at a young age and purchases more frequently, splurging on every thing from jewellery and fashion, to cosmetics and handbags, industry experts say.

Many millennials are also choosing to remain in the country's outlying provinces, shunning more expensive, larger cities such as Beijing and Shanghai, thanks to rapid industrialisation and urbanisation.

''Where the spend is? It is the post-90s, the young generation - definitely a young generation that spends money on luxury,'' said Shanghai-based Daniel Zipser, senior partner at McKinsey & Co.

Revenue growth in China's luxury segment was around 15 - 20 percent for the first half of the the year, Zipser added.

TRADE WAR JITTERS

Chinese luxury shoppers account for over $500 billion yuan (57-24 billion pounds) in annual spending, representing almost a third of the global luxury market, McKinsey said in its latest report.

Brands including Kering's Gucci to Britain's Burberry and French luxury handbag maker Hermes all reported resilient appetite from Chinese shoppers in the second quarter even as escalating China-US trade tensions cast a spell over the broader economy.

The share of luxury purchases made in China is rapidly increasing, several executives said, spurred by, spurred by price cuts from top brands after authorities reduced import duties on some goods and made it harder to buy product from overseas websites and vendors.

A strong Euro at the start of 2018 also put off tourists from spending in Europe, executives said. Prices of luxury goods in China, previously significantly higher than in Europe and the United States, have been gradually falling.

Taxes have also been lowered by 7-17 percent, allowing firms to cut prices.

Italian luxury outerwear maker has reduced the prices in China by 3.5 percent on average since July, while Gucci, Louis Vuitton and Hermes have also cut prices.

''When I compare it with the United States the price difference between brands is not that large ,'' said Sunny Deng, 28, who studies in America but was holiday in Shanghai.

''Sometimes it's even cheaper here.''

Increased global tariffs? It would be unwise not to make some allowances for the uncertain political and macroenvironment,'' Jean-Francois Palus, Kering group managing director, said in July. LVMH chief financial officer Jean Jacques Guiony, on a call with analysts in July, also warned of potential risks from increased global tariffs.

Although the luxury industry is not in the front line in the Trade War, such a risk would certainly bare negative consequences. Brands have also been putting increasing emphasis on their digital offerings to court China's online shoppers.

Louis Vuitton and Gucci both launched Chinese e-commerce sites last year and Hermes plans to roll out its site in China later this year.

 With respectful dedication to the Students, Professors and Teachers of China, and then the world.

See Ya all ''register'' on : wssciw.blogspot.com - The World Students Society -for every subject in the world and Twitter- !E-WOW! - the Ecosystem 2011:

''' Students & Luxury '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless