2011 Bain China Luxury Market Study

Brand landscape is becoming more dynamic; cautiously optimistic outlook on China luxury market Strong growth in 2010 & majority of 2011; with a more dynamic and active brand landscape 1 Continued expansion into tier 2/3 cities, with a slower pace 2 Leading brands emphasizing more and more on improving customer experience 3 Acceleration of online platforms as channel for brand marketing and ecommerce 4 Heritage-focused brand building activities 5 Emerging Chinese-culture- inspired luxury brands 6 Risk of negative media exposure Overall business environment remains positive with a few uncertainties • Overall macroeconomic environment favors continued growth, despite recent economy slowdown • Consumers confidence remains high; level of sophistication rising™ This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent SHA 2011 Bain China Luxury Market Study_Media release_vf 14

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