New Experience Economy to Drive China Luxury in 2011
Everything about China happens fast.
In less than a decade China has gone from an almost insignificant consumer to a key consumer of global luxury brands. The pace of transformation is stunning.
While the leading 2010 story was the omnipresence of global brands in China, many Chinese luxury trends from 2010 will extend to 2011 such as continued battle for tier 2/3 cities, online commerce proliferation, men’s market, luxury brand acquisitions, high-level customer services and experiences, and more understated luxury consumers.
In 2011, the spotlight will cast on China’s import of international leisure preferences of the rich. So far, China’s luxury market is all about China’s import of international luxury goods.
Leisure activities of the rich are already available and their popularity will rise in 2011. “Catching up” now means to match the range and availability of consumer experiences.
Consumer demand for luxury experiences generally lagged the demand for luxury goods, but the time line in China is much speedier. Luxury demand for experiences is expected to occur almost simultaneously with that of luxury goods, largely helped by globalization. Ideas, opportunities, and offerings spread much faster today.
China’s affluent want unique and memorable experiences as much as their Western counterparts.
Golf, sking, polo, equestrian, yachting, private jets, travel and gastro luxury (aka high-end fine dining) are all part of the new experience economy for the Chinese elite.
Golf is the luxury leisure import that conveys the quintessential symbol of wealth and power in China. Generally limited to China’s highly affluent, it was one of the first leisure sports reintroduced since the Communist era.
The country has few public courses and private golf clubs are pricey. The Shanghai Pudong Golf Club near downtown and site of the BMW Asian Open costs more than $100,000 to join.
“Polo is riding the luxury wave,” reports online news site Xinhuanet. For China’s elite, polo provides “an outlet for their competitive masculine instincts and a platform for meeting other super rich.”
“First recorded in ancient Persia in the 5th Century BC, polo spread across Asia, including China. Its popularity among the nobility during the prosperous Tang Dynasty (618-907 AD) was depicted in paintings and sculptures.”
Tianjin is the home of the country’s largest polo club, The Goldin Metropolitan, which opened in November 2010. The club features a five-star hotel, stables for 150 horses, modern equestrian equipment, a training school and villas.
Its invitation-only membership and fees ranging from 380,000 yuan (57,000 U.S. dollars) for an individual to 10 million yuan (1.5 million U.S. dollars) for a team.
Across China, many are betting big that yachting will take off according to Time. “As incomes rise, pastimes once considered the preserve of the Western world are increasingly within reach of more and more Chinese. China’s newly affluent upper class is driving a new wave of investment in luxury lifestyles.”
Rick Pointon, director of the Beijing Sailing Center, says business is booming as sailing becomes increasingly attractive to wealthy professionals. “When I first arrived in China at the end of 2006, there was no place for sailing near Beijing,” says Pointon. “We now have more than 30 members, and membership is growing by 30% to 40% annually.”
Coastal city Tianjin, which bills itself as a center for the super rich, has invested heavily in yachting as well.
Equestrian is becoming increasingly popular among China’s nouveau riche. “The sport has long been thought of as a noble one reflecting its practitioners’ identity and social status but, with the rise in living standard and people’s change in attitude toward the sport, equestrian is more affordable and more trendy than it has ever been in Beijing,” reports the China Daily.
Beijing has about 60 riding clubs and about 80 percent of the nation’s horse riders.
More affordable than other leisure activities of the wealthy, most riding clubs in Beijing charge between 2,800 to 30,000 yuan a year for membership plus additional horse-raising fees.
The time is ripe for luxury leisure in China. “Luxury pastimes like polo and yachting are not ahead of their time in China. They are pushed forward by rising social demand,” says Wang Weiming, executive director of the Asia-Pacific Competitive Power Research Institute (APPCC).
photo credit: the yacht dream, par for china, luxist