Xi Jinping’s Common Prosperity has been interpreted negatively by many because it is perceived as an anti-rich campaign. So a slight panic has arisen among the various foreign brands exporting to China.
In reality, things are a bit more complex and articulated.
The “Common Prosperity” strategy aims to dilute the concentration of $$$ from the top to the middle class (about 500ml), therefore, negative for the extreme tip of the rich, but positive for brands trying to penetrate this segment.
It should also be understood what is meant by the super rich and middle class, and how our brands are positioned, because attention, this year Ferrari set sales records, so perhaps not even the Reds are really all the preserve of the mega rich.
For our fashion and luxury, I think it’s actually excellent news because a 1000/5000 euro bag is just what these new 500 million consumers can afford.
But … things must be done well, very well, because the terrain of consumer goods is very, very slippery and you have to understand the pitfalls in time.
I fear that our companies and associations, from Confindustria onwards, are not well informed about these opportunities and these risks. Attention!
published on Financial Times.