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Owing to the emergence of several metropolitan cities and the subsequent appetite for luxury purchases in China, the country has been the undoubted growth driver of several accessories brands over the past five years. China overtook the US to become the largest personal accessories market by value sales in 2011, and since then has grown at a comprehensively faster pace. However, the US will continue to be the most influential market in the global strategies of most personal accessories players for three major reasons.
Nearly all personal accessories categories in the US have a highly evolved pricing structure. As such, the appreciation of private label, mid-priced, affordable luxury and high-end luxury brands is well defined among their respective target audiences. Fossil and JanSport are recognisable examples of mid-priced brands, while Coach and Michael Kors epitomise affordable luxury. On the other hand, most locally-based players in China tend to focus on economically-priced products, while international brands satisfy demand for high-end products. As a result, luxury players Swatch Group, LVMH and Richemont are the biggest international companies in China.
Although sales in China for a few global players such as Swarovski and Swatch Group exceed their sales in the US, the opposite applies for most key players, including LVMH, Richemont, Kering (PPR) and Samsonite. In addition, several globally recognisable brands including Tiffany & Co, Coach and Fossil are based in the US and are fairly reliant on their home market. In stark comparison, the biggest Chinese brands, including Chow Tai Fook and Lao Feng Xiang, have barely any presence outside China. As such, they are rarely a threat to global players unless they are focusing on long-term prospects within China.
Value sales for personal accessories in China are set to be nearly 50% higher than those in the US in 2014. However, nearly all of this difference can be accounted for by real jewellery. In the Chinese competitive environment, where jewellery dominates accessories purchases, other categories such as bags and watches have seen relatively little investment from local players. In addition, localised designs and the cultural importance of real jewellery have resulted in international jewellery brands finding it difficult to navigate the Chinese jewellery landscape. The importance of China in global strategies will only grow if the jewellery consumer becomes more informed about international trends and local players in bags and watches are aggressive in marketing their products within China as well as in neighbouring markets.