Louis Vuitton opened a store in China today that is its largest in Asia outside Japan, underlining western companies' confidence that an increasingly wealthy middle class will spend on luxury goods.
The flagship brand of French luxury powerhouse is convinced of China's growth potential despite a proliferation of knock-off goods and annual incomes that average just $1,000.
The boutique in Shanghai, China's richest city, sits on the chic western edge of Nanjing Road. It carries Louis Vuitton's entire range: from its signature trunks and bags to shoes and jewellery.
"It's not a question of potential, it's already here. The luxury goods business is growing very strongly . . . at a speed where it's a challenge for us to keep up," said Mr Christopher Zanardi-Landi, general manager of Louis Vuitton in China.
The country is its top market after Japan and the United States.
The store could help convince Chinese, who usually head to the larger and better-stocked boutiques of cosmopolitan Hong Kong, to stay at home and spend a rising pool of renminbi.
Louis Vuitton, which celebrates its 150th anniversary this year, opened its first store in China in 1992 and has opened 12 others since. Luxury firms from LVMH to Gucci-owner PPR are enjoying a global pick-up in demand after 9/11, the Iraq war and the SARS epidemic.