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Todd pushed back from his desk and let out a long sigh. If he couldn’t come up with some way to sell high-end watches, the board was going to fire him. The problem was, no one wanted high-end anything- with the economy the way it was, folks were saving just to pay the mortgage. A glance at the news brought more headlines about Europe’s woes, too. Todd was at his wits end. If he couldn’t find a new market, he was done.
As the United States economy continues to be sluggish and Europe is in a downright crisis, it can seem like a bad time to be in business. However, there is growing income around the world, and people are eager to spend. To take advantage of this trend requires a global perspective.
Where income is growing
One word – China. According to a recent article in Smart Money, for the first time in modern history China is buying more luxury goods than any other country in the world. Chinese buyers now account for 25% of the global market of luxury goods, up from 2% a decade ago. Affluent Chinese purchases accounted for 70% of the growth in luxury sales in 2011.
Even better, Chinese tourists spend a lot when they travel. This allows many companies to cash in on the growth in prosperity without having to be based in China (which is a tough place to start). Techology also allows almost any company to have an overseas reach.
How to target newly affluent buyers
American businesses have an advantage in the fact that Asian buyers prize American goods. With the newly formed and growing Chinese middle class looking to buy quality goods, businesses have a great opportunity. In addition, the Chinese carry very little to no personal debt, making it easier for them to spend money. Here are three steps to reach this new market:
1. Focus. The first step to start targeting these consumers is get them on your company’s radar. The internet and other technology has made it much easier to market to citizens of other countries. In addition, you can try to draw in Chinese tourists if you are in a major city.
2. Be Chinese Friendly. The next thing you can do is adapt your packaging to be Chinese-friendly. Engage a partner with language know-how to add Chinese labeling and directions to key products. This is especially important if you intend to place your product in Chinese stores or on Chinese websites, as English is not widely spoken.
3. Be High-End. Finally, focus the Asian consumer on your highest-end product. The newly affluent are looking not only for quality, but for a sense of wealth and prestige. The more you can market your products in a way that fills this need for status, the more the newly affluent will be flocking to your door.
The American and European economies are floundering, but the news isn’t all bad. By targeting newly affluent Asian buyers, you can draw new customers to your high-end products and make a great profit in the process.
What profit opportunities does your company see in these tough times? Share in the comments!
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