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44 Our changing world 03 LANGUAGE SKILLS EXPLORE EXTRAS Explore reading: Luxury goods in China Read the text about luxury goods in China. Complete the sentences (1–8) using a maximum of four words. Write your answers in the spaces provided. The first one (0) has been done for you. 38 Luxury goods in China: beyond bling Life is getting harder for purveyors of luxury in China, but the growth prospects are still fabu- lous.  “It was an amazing golden age,” reflects Guillaume Brochard of Qeelin, a Chinese jeweller. From 2007 to 2011, many luxury-goods firms enjoyed double- digit annual growth in China, which became their most important market. The first blows came last year, with an economic slowdown and jitters about the political transition. Now, a crackdown on corrupt gift-giving and a populist backlash against ostentation have added to the woes.  The outlook for luxury-goods firms appears to have dimmed. Internet users have posted incriminating pictures, for example of poorly paid bureaucrats wearing suspiciously pricey watches, which have caused heads to roll. Mobs have also disrupted banquets deemed to be too lavish, on occasions forcing officials to their knees to beg for forgiveness.  This has traumatised some purveyors of con- spicuous consumption. Beijing Xiangeqing, an upmarket catering outfit that is usually highly profitable, plunged into the red last quarter. Sales of shark fin, the key ingredient of a soup served at fancy dinners, are down by around 70%. Imports of bottles of Bordeaux costing more than $800 have collapsed.  But look beyond the lavish public banquets and a more complicated picture emerges – and not just because devious officials are now throwing their extravagant parties in private. It is true that some luxury-goods firms are grappling with slowing demand in China: imports of Swiss watches, for example, fell 24% year-on-year in the first quarter of 2013. But Andrew Keith of Lane Crawford, a high-end department store that first opened in Hong Kong in 1850, reports no slowdown at his stores there or in Beijing. Burberry, a British fashion brand, enjoyed sales growth in China of about 20%. Sales of private jets in China are still soaring.  So what is really going on? It seems that China remains the most important country for the luxury industry. However, luxury firms must now venture beyond the coastal cities, where they have made easy fortunes, cultivate new types of customers and market niches, and experiment with new business models. It will be worth the effort. It is estimated that luxury sales in greater China (which includes Taiwan, Hong Kong and Macau) will grow by 6 to 8% this year, making it a luxury market second only to America.  But even that does not tell the full story. China’s rich are travelling more and farther, and do lots of luxury shopping on their travels, especially in Europe, whose weak currencies encourage Chinese visitors to splash out. Last year mainland Chinese took 83 million foreign trips, up 18.4% on 2011. Global Blue, a big tax-free-shopping firm, says its refunds to Chinese shoppers shot up by 58% last year to more than 24 billion yuan ($3.9 billion).  To make the most of this trend, firms need to rejig their shops worldwide. They need Mandarin- speaking assistants, VIP rooms big enough to accommodate large tour parties and payment systems that can handle Chinese credit cards. Philippe Léopold-Metzger, who runs Piaget, a Swiss watch and jewellery brand, says he regards the firm’s outlets in China itself more as showcases than profit-earners: half of his global business comes from mainlanders, but they mostly buy while on foreign trips.  That said, there are still plenty of opportu- nities to expand sales inside China. Kent Wong, Nur zu Prüfzwecken – Eigent m des Verlags öbv