Hangzhou, with a well-developed private economy and abundant private capital, has developed the largest private sector among all major cities in the Yangtze River Delta (PRD) region. It is one of the most coveted luxury brand consumption markets in China, following Beijing and Shanghai. Despite the economic turndown, statistics show that luxury brand consumption in Hangzhou is on the rise in 2009.

Typical luxury brand consumers include local residents, foreign-invested enterprise employees stationed in the city, private enterprise operators from neighboring cities such as Ningbo, Wenzhou and Shaoxing, and tourists and workers from outside Zhejiang province. These consumers have a relatively high social status, good educational background and strong financial strength. With a pursuit for a life of quality, they are the cornerstone of Hangzhou’s luxury goods and branded goods market.

University students account for a considerable share of the Hangzhou consumer market as well. While these young consumers are not financially independent and are not fully mature, they tend to compare themselves and compete with their peers. According to a recent survey of university students in Hangzhou, their major consumption items are food, entertainment and consumer goods (such as clothes, cosmetics and accessories).

Of those surveyed, 27.9% (with female students accounting for the majority, especially senior year female students) spend their money on consumer goods such as clothing, cosmetics and accessories. The survey also found that quite a lot of university students have strong preference for famous brands. In order to buy a branded product, some of them would cut down on food and clothing and other necessary expenses.

Hangzhou Tower, the most up-market department store in the city, is a place where top-notch luxury brands from all over the world converge. Hangzhou Tower’s total sales in 2008 topped 3.805 billion yuan, a growth of 16.1% year- on-year, ranking first among all department stores in China. The huge sales volume of Hangzhou Tower fully testifies to the staggering luxury goods consumption power in Hangzhou. Consumers in this group place emphasis on the brand, quality, design, color and style of the product and price is not their main concern.

The best selling brand names in Hangzhou include Louis Vuitton, Chanel, Dior, Burberry and Lancôme. It is reported that 70% of the most well known brand names have made an appearance in Hangzhou.

By Li Hui