The first major problem is staffing. Luxury brands sell consumers in part on a certain lifestyle idea, and it’ s important for sales staff to understand what the customers are aspiring to in buying the product.

One company whose chief executive participated in our survey discovered recently that most of its sales managers outside China’ s biggest cities had never experienced such niceties as a luxury spa or upscale restaurant. They weren’ t equipped to understand what it felt like to be served as a luxury customer. So the company began sending its employees to an upscale hotel for two-week stints so they could “experience a life of luxury, ” according to the chief executive.

Some luxury companies recruit for sales trainees at China’ s top universities. And to keep employees in smaller cities from abandoning jobs on the sales floor for office work - generally considered more prestigious in China - companies have started offering international rotations as an inducement not to look for jobs elsewhere.

Then there’ s the need for luxury brands to differentiate themselves in a crowded field. China’ s high-end market is highly fragmented, with no single brand dominating individual product categories. This is starting to change: In each luxury-goods category, five brands account for around 50% of the market, indicating early signs of concentration. The key here will be brand-building.

Weaker brands already are finding it tough to compete with the likes of Cartier, Louis Vuitton, Hermes or Gucci, which have advertised for years to build name recognition. Companies also have to remember that recognition in one part of the country won’ t necessarily translate elsewhere. For example, watchmaker Rolex started in the South of the country near Hong Kong and built strong positions there. But when it moved into the Northern provinces, it had to invest heavily in print ads, events and in-store displays to reach its new customer base.