Angela Wang, who gained fame in a reality TV show, takes part in the Fall 2014 Ralph Lauren Children's Runway Show in New York. [Photo/China Daily]

Luxury firms are looking to cash in on China's 'little emperors and empresses' with a range of glitzy products

Inside the Ralph Lauren kids' clothing store at Plaza 66 on Nanjing West Road, Chen Fang, a housewife from Hubei province in her early 30s, is sifting through embroidered velvet and flutter-sleeve dresses for her four-year-old while her husband guards some shopping bags from Chanel.

"We fly to Shanghai to shop because we can't get these brands where we live," said Chen.

"I don't have a specific budget for my daughter, but I spend as much on her as I do on myself," she added. "I buy new clothes and shoes each season, mostly from luxury branded stores, to keep her looking different from the other kids."

Baby Dior set down tent poles in Shanghai in 2010－four years after Zara opened its first kids' clothing store in the city－and a slew of top-end foreign brands have followed suit in recent years.

Now, over one-third of the fourth floor at Plaza 66 is dedicated to foreign luxury brands for kids－Armani Junior, Moschino Baby, Young Versace－as luxury retail sales across the country have been hit by a wide-ranging clampdown on graft and gifting with public funds, compelling retailers to diversify their revenue streams.

The Chinese mainland's luxury goods market slowed from 7 percent growth in 2012 to around 2 percent in 2013, and shows for the first time a negative trend: minus 1 percent growth in 2014, according to three annual luxury studies released by Bain & Company.

Watches and menswear were particularly hit by the anti-graft campaign, with the growth momentum shifting to women's categories and fashion.

The good news for retailers is that they can earn higher profits on kids' clothing because less material is used but the prices aren't much lower, said researchers at the University of International Business and Economics in Beijing.

Even Ferragamo recently launched a mini-selection of girls' shoes in two classic ladies' designs in Shanghai.

"The baby and kid luxury market is very likely to continue growing at a faster clip than the rest of the luxury market in China as a result of the recent slowdown," said Javier Calvar, COO of Albatross Global Solutions, a Hong Kong-headquartered marketing services provider.

"This is because Chinese parents would rather stop buying for themselves than for their children," he added.