In the Lap of Luxury Goods

Kevin Yeoh, a former -based fund manager with AMP Capital, sees potential profit lying in China’s luxury market. From Phillip Wen at Morning Herald:

Yeoh warns that any sort of direct requires , but he has some handy tips. He says investors should look at what the Chinese will want to buy during the next decade. He also prefers established Western companies with a healthy exposure to China’s growth, notably -goods companies.

”Generally, you would think that the corporate governance would be better for Western companies,” he says. ”There’s going to be more disclosure, and it’s a lot easier to understand a luxury-goods company generally than some sort of Chinese internet company.

[…] The downside is that the appeal of luxury brands can be fickle, and the saturation of brands could render them unpopular. ”[Shanghai women] always pride themselves as the most sophisticated and elegant and most open to the West,” Yeoh says. ”When they see the of the Shanxi coalminers wearing Louis Vuitton … they need to be wearing something else.”

See more on luxury demand in China via CDT.

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