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de. The discrepancy in ranking indicates there are differences in methodologies which economist use come this conclusion and/or lack of available information. But, what can be drawn from this ranking is that China’s luxury market is vastly substantial and notably placed with in the top five premium markets claiming approximately 27% and reaching approximately 3.1 billion USD. It should be kept in mind the number of Chinese tourists who travel abroad and purchase premium products, which is unaccounted for in the latter figure. In 2006, nearly 35 million Chinese people traveled to other countries, and there is no reason as why this figure should not grow (LC, 2010).

Obviously China makes a mark in the premium world market. However as convincing the figures may seem, a plausible question for enterprises is whether or not China is a profitable in the premium market. Overtime, one is to say yes, but a more a cut and dry answer in terms of starting-up and cash flow is not so much. As premium brands open up stores in the market they need to continue at a rate of 20% annually to keep up with the current growing market. Furthermore, it has been reported by some luxury firms that sales per square meters is nearly three times lower in China than other countries such as Japan. Therefore, firms experience unsatisfactory income statements than from what was initially expected. In sum, China is a growing premium market, however for the current state it must be stressed that it is only large enough for so many players (LC, 2010).

6 China’s High-Quality Clothing Industry

Currently a hot topic is the current state of China the improvement in the quality of their products, which includes apparel. This new, but important, industry is one of which is taking flight. The high-end clothing industry has many successful participants, and many potential players that want a piece of the pie. The overall development of China can be considered the undertone of the development of the high-quality clothing industry.

6.1 Market Share

Below, Table A reveals China’s market value by sector. In regards to consumption, it believed that China has surpassed Japan in terms of market value. This is quite significant because Japan consists of 40% of luxury apparel market value worldwide (Aroq Ltd., 2009).

Table A: China’s Luxury Apparel Market Value (USD in billions)

6.2 Main Players

From a worldwide perspective the main players in terms luxury clothing market value include: Japan with 31.8 billion USD, Europe with 23.2 billion USD, and the United States of America with 22.7 billion USD (Aroq Ltd., 2009). In terms of the Chinese luxury clothing industry the main players include: Italy, Japan, and South Korea. Notably, Italy has revealed steadfastness in making Chinese market a priority with Italian clothing imports reaching 17.2% showing the significant demand for high-quality clothing (Italian Trade Commission, 2010). From a firm-wide perspective, the main players consist of Gucci and Louis Vuitton whom entered the market in 2007 and 1992 respectively. Other significant players include Burberry, Christian Dior, Channel, and Hermes (Aroq Ltd., 2009).).

6.3 Domestic versus Foreign Players

Domestic Chinese manufactures flood the international market with low coast low end products. The majority of domestic products consist of low-end