There is no question that rising demand for luxury goods will soon make China one of the world's most valuable markets for the fashion sector. But what is uncertain is whether the local industry will transform itself in time to capture some of the spoils, or whether foreign labels will continue to dominate. In order for local fashion brands to become world leaders in their own right, they will need to evolve from merely copying foreign trends, to creating original Chinese fashion and a vibrant underlying industry.

The prize is significant. Local spending on luxury goods, including fashion, is forecast to increase from $10 billion in 2009 to $27 billion by 2015, or one-fifth of global demand. The brands that currently dominate the high-end market are noticeably foreign: Dior, Louis Vuitton, Chanel, Gucci and Armani. Even rivals that are pitched at more of a middle-market overseas, such as Zara or H&M, are highly coveted here.

This is a risk. As local incomes continue to rise, upwardly mobile young professionals will increasingly aspire to the high-end. Those that capture their spending will also gain a far higher margin business. But right now, it is the foreign brands that are best placed to succeed here. By contrast, Chinese brands dominate the mass-market, competing on price, rather than on sophistication and allure.

Making this step up the value chain is crucial, but will not be easy. Designer goods from Italy and France carry immediate cachet, whereas the "Made in China" label has become a global synonym for low-cost. This has helped propel China's growth as the world's workshop, but it is essentially toxic for fashion buyers seeking social status.

To adapt, aspiring Chinese luxury brands and retailers could do worse than look to France for inspiration in terms of how the French industry has been developed. Five specific lessons stand out:

1. Aim for the high end. The French fashion industry got its name and legitimacy by long dominating the high end. It understands that fashion relies on several key rules: provide the best quality, an aura of exclusiveness and unparalleled customer service. Starting as early as the 17th century, it has sought to institutionalize this - from brand protection for its haute couture label, through to grands couturiers who define the season's trends in compliance with strict criteria. Although French fashion spans all segments of the market, it is particularly noted in the high end. In essence, haute couture acts as the research engine of the world's fashion industry. By not prioritizing this within China, local designers are missing the ability to build a world-class reputation.

2. Find financial backers willing to take a long-term view. Fashion trends may switch even more rapidly than the change of seasons that they follow, but success in the industry requires a long view. Deep-pocketed angel investors backed both Chanel and Hermes for decades as they evolved. This is crucial for allowing up-and-coming young designers the time to develop into future stars. This is especially relevant for rapidly growing small and midsize local fashion brands, most of which are either self-funded or privately owned. These owners need to consider taking a longer view, reinvesting their profits into developing design talent for the future.

3. Be willing to open up to foreign investors. Local brands should not veer away from foreign direct investment, but recognize that this can be a crucial part of the development of the broader fashion industry. The creation of the Shang Xia brand in 2010, with the backing of Hermes, is a useful example. Although some have decried its foreign backing, the reality is that its designs are based on local materials and crafts, done in collaboration with Chinese artisans. Over time, this will provide the necessary foundation for currently unknown names to develop and launch their own ventures. Local brands need to be willing more willing to reach out to foreign investors: less so for their capital, but more for their design talent and operational expertise.

4. Import and export top fashion talent. All major innovation hubs rely on a diverse mix of cultures and nationalities to succeed. The local fashion industry needs to recognize this. Designers ought to be encouraged to spend time abroad, soaking up ideas, developing expertise and infusing Chinese design into other places, while foreigners should be welcomed here, too. Japan's Issey Miyake and Kenzo both cut their teeth in Paris before developing their own brands. Not only did Japan's fashion industry benefit as a result, but so did France's, not least by incorporating their breakthrough ideas around minimalism and textile innovation.

5. Help create a deeper and wider ecosystem to support the industry. Every industry relies on a diverse ecosystem to succeed, and fashion is no different. Close cooperation is needed between companies, the media, the government and other stakeholders. Elle, Marie-Claire and Fashion TV, among others, all help to promote the allure of French design and fashion weeks, while government helps with tax incentives, intellectual property protections, design schools and broader industry marketing. Even fashion houses collaborate, via professional associations, such as the prestigious Comite Colbert, to help organize promotional events and exchange best practices. All this is needed here to help develop a deep underlying ecosystem.

These are all important lessons, but the reality is that they need to be adapted to local dynamics. Europe may be considered a diverse continent, but from a fashion perspective it's more homogenous than heterogeneous. The key fashion hotspots and retail areas are deeply understood, major urban markets and demographics change little each year, and disposable incomes are relatively comparable across key markets.

By contrast, China is unchartered territory. Growth is not just limited to the tier-one cities, but across the second, third and fourth tiers too. It is simply not feasible to fully understand the nuances of this huge and constantly changing retail environment. All this makes brand expansion far more challenging here.

Stephane Girod is a research fellow, Accenture Institute for High Performance; Raymond Lau and Wilson Lam are directors of retail with Accenture Greater China.