Caution is the name of the game

China's luxury goods market may be booming, but global brands should still exercise prudence in trying to grab a share of the market

Luxury brands are targeting consumers in the emerging markets, because these new engines of the global economy have strong and growing purchasing power even against the backdrop of global recession. This is especially true of China.

According to the latest data from the Ministry of Commerce, the goal for the next five years is a 15-percent annual growth for retail sales of consumer goods to reach a total of 3.2 trillion yuan ($507 billion) by the end of 2015. And many top brands are scrambling to grab a share of this lucrative market. But is such confidence justified?