2011 Bain China Luxury Market Study

>60% of growth in 2011 continue to come from new customers, however share from existing customers improved China luxury market (RMB B) 115 I New customers Existing customers 105- Total spending 95- 85- 14.9 110.8 8.8 (63%) 12.5 87.1 (37%) 6.2 75- (67%) 68.4 (33%) 65 55 2009 2010 2011 Est KEY HIGHLIGHTS • China market is still supply driven; new store openings create new demand • A gradual shift towards store performance improvement expected "As more brands open new stores in tier 2/3 cities, more people have access to luxury goods, and brands are attracting many new customers.” PR Manager, Luxury brand "Many brands are starting to move from land grabbing stage to performance improvement." Source: Bain Survey of Luxury Goods Consumers in Mainland China (2009: n=1,410; 2010: n=1,471; 2011: n=1,959); Expert interviews; Brand interviews; Analyst reports; Company reports; Literature search; Bain analysis Industry expert 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 7

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