Morgan Stanley Has Its Eye On China’s Luxury Market 30/9/10

It is certainly all eyes on China at the moment, as far as the luxury industry is concerned. China is a huge, lucrative cake, and everybody wants a piece. Investment banks are taking notice of China’s new found appetite for luxury goods, Morgan Stanley’s private equity arm has just bought a $42m stake in Sparkle Roll, which sells luxury brands such as Bentley, Rolls Royce and Lamborghini. It seems like a wise investment to us. They certainly have a knack for tapping into the money, and the Chinese, for tapping into the luxury brands.

At the rate they are going, there is no shortage of Chinese demand for the kinds of goods Sparkle Roll represents. Particularly in the cities of Beijing, Shanghai, Hangzou, Shenzen, Chengdu and Shenyang, the ‘nouveau riche’ just keeps on growing. China’s impressive economic growth has resulted in luxury brands bending over backwards to become popular. So far, the Chinese market has proved open, but particular. As we have seen, consumers have specific tastes– fashion houses have been tweaking their images to appeal. Will the investment banks care to invest in the proper marketing of the businesses they invest in? From what we have seen in China so far, marketing is make or break…

Image credit: images.businessweek.com

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