Despite the financial crisis, China's luxury goods market has exploded over the past few years. By the end of 2009, China consumed 27.5 percent of luxury products worldwide, overtaking the U.S. to become the world's No. 2 luxury market, second only to Japan.

International brands have shown rabid interest in tapping into China's exploding luxury market, and are now looking to reach consumers in second-tier Chinese cities outside the core targets of Beijing, Shanghai, and Guangzhou.

In a 2009 report by fashion and luxury consulting firm Ecole Group that surveyed 100 international luxury brands about their presence in the Chinese market, the following cities are most loved by luxury brands looking to establish retail stores in China.

   Qingdao

 

Number of luxury brands: 32

Number of luxury franchise stores: 37

 

Qingdao is a major city in eastern Shandong province. To the east, a short distance across the Yellow Sea, lie Korea and Japan, making Qingdao a major seaport for international trade. Surrounded by the sea on three sides, Qingdao attracts many visitors with its charming seascape. The city's red roofs, green trees, blue sea, and azure sky paint a picturesque urban landscape. In 2009, Qingdao was named China's most livable city.