High economic growth, increasing disposable incomes and an emerging middle class that was optimistic about the future had created a booming market for luxury goods in China. Growing wealth was accompanied by greater willingness to spend and travel. Many Chinese now had the opportunity to travel for business and leisure and this had increased their exposure to luxury brands and lifestyles overseas. The culture of gift giving for business as well as social reasons was also fuelling this demand. Luxury goods were also a symbol of success in this emerging market. Gucci had seen tremendous growth in China but of late, this growth had stagnated due to the slowing economy and the government's crackdown on corruption. The preferences of Chinese consumers were also changing. The case illustrates some problems luxury brands faced in China as the market matured and how environmental changes affect the marketing strategy of luxury brands. The case provides students the opportunity to suggest ways on how Gucci should move forward.
ASJC Scopus subject areas
- Business, Management and Accounting(all)