China may become the world’s biggest luxury market in some years but cultural challenges to win customers’ hearts for certain types of products remain, industry executives said this week.

Champagne house Taittinger said it could make high-end sparkling wine in China but the market was not ready for it yet…

… while Lamborghini said the country’s tradition of luxury chauffeurs, bigger than sports driving, made expansion there a challenge.

China will overtake Italy as the second-biggest market behind the United States for iconic sportscar maker Lamborghini within three to five years, the group’s chief executive said on Wednesday.

The Chinese associate luxury more with chauffeur-driven cars than sports cars because of bad road conditions, traffic congestion and driving standards, Stephan Winkelmann told the Reuters Global Luxury Summit.

But the sports car culture will gain ground in China, he said, as road infrastructure develops fast and Chinese consumers aspire to own well-known European luxury brands.

Hermes believes turbulence could hit the global luxury goods industry for the next two years and has put some expansion plans on hold, the French fashion and leather goods group said on Monday.

Watches and jewelry will take at least two years to recover from the current luxury spending downturn but fashion sales could pick up faster, Hermes Chief Executive Patrick Thomas told the Reuters Global Luxury Summit in Paris.

“In my opinion, turbulence will last rather long, maybe two years,” Thomas said.

The world’s second-largest luxury goods group in terms of market value behind LVMH said it had postponed the opening of two shops in China and two leather goods plants in France.

Gucci plans to open two to four more stores this year in China, after opening its 28th on Saturday, undeterred by uncertainty in the global economy as China is set to lead future luxury consumption.

For the moment, China’s $8 billion luxury market accounts for just 3 percent of global sales, compared with 38 percent in Europe, 33 percent in South and North America and 12 percent in Japan.

But China (and Brazil!) are projected to be the two fastest-growing luxury markets through 2012, according to consulting firm Bain & Co.

In June, the 209-room PuLi Resort and Spa will offer all the trappings of an urban resort, including 24-hour butler service, bathtubs with views of the Shanghai skyline, an Anantara Spa and an exclusive lounge for guests of The PuLi Club.

Prices: from $650 (opening specials will be available until the end of September)

‘
Gucci opens it 28th store in China on the 6 June 2009, to mark the occasion Frida Giannini has created a limited edition “Shanghai Dragon Bag”.

A version of the sort after Boston Bag in white with two red Dragons facing each other in a symmetrical fashion and the Gucci signature in the middle, underneath is a bright red column.

Inspiration for the design comes from ancient Chinese Symbolism including the use of prosperous red, a sign of good luck.