This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Asia Wants Your High-End Retail Right Now

SAN DIEGO ( TheStreet) -- Buck Pei spends about six months of every year in China, and in the past five years he's noticed the changes:

A boom in the number of glitzy stores, high-end malls and expensive shopping centers opening to sell luxury goods, making even cities in the country's interior almost unrecognizable in some cases.

"In every tier-one and tier-two city there are very luxurious brands opening up stores. Not only in terms of luxury clothing, and women's fashion, but also in terms of automobiles, high-end watches and jewelry," says Pei, who teaches at Arizona State University's W.P. Carey School of Business.

According to Rich Pickings -- The Outlook for Luxury Goods in Asia, a report issued this month by the Economist Intelligence Unit, after years of growth the region's luxury goods market is actually beginning to show signs of a slowdown, from Japan to China to Hong Kong.

But there remain huge long-term opportunities in the region. Asia could account for more than one-half of luxury revenue globally within a decade, compared with one-third today.

Those sales will be driven primarily by the expanding middle class, the report says. By 2030 there will be more than 270 million Asian households with income exceeding $50,000, a six-fold increase from today. The number of households with annual income of more than $150,000 will rise from the current 2.5 million to around 27 million by 2030, and China alone will have 12.7 million such households.

Those numbers translate into luxury buyers at many levels. In many ways, it's a story of optimism, even among those with far less disposable income, says James Roy, a senior analyst with the China Market Research Group.

"Over the last 20 years, there's been really rapid economic growth, which has created a generation of optimistic young people who feel good about the future and who haven't really seen hard times. They've seen double-digit wage growth every year," Roy explains.

That means even a secretary earning about $1,000 a month is saving up to buy that luxury bag or other luxury items, such as apparel or watches, Roy says.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs