Beijing Puts a Damper on Luxury Ads

on March 23 2011 | in Lifestyle Retail | by | with 1 Comment

Beijing Billboard

Is China wrestling with an identity crisis of economic proportions?

On one hand China is encouraging economic prosperity, while on the other, it is trying to temper any appearances of wealth.

Beijing has moved to ban outdoor advertising or billboards that promotes hedonistic or high-end lifestyles over concerns that these prominent ads remind people of the country’s widening wealth gap.

The Beijing Administration for Industry and Commerce has issued an mandate for businesses to remove words such as “luxury”, “royal”, “supreme” and “high class” from billboards, or face a 30,000 yuan ($4,600) fine by April 15.

It also prohibits excessive promoting of “foreign” things. The agency gave no details on what the “foreign” things were, but indicated that such promotions help create a politically “unhealthy” climate.

It is presumed that these advertisements encourage people to aspire to a “foreign” lifestyle. Many wealthy Chinese openly display their foreign designer clothes and handbags, drive German luxury cars and drink French wine.

The southwestern city of Chongqing also issued a similar mandate last week, banning real estate advertisements using phrases including “best”, “unique” or “irreplaceable”.

The Chinese government is struggling to deal with the serious threat of China’s wealth gap. High inflation has put tremendous pressure on the millions of China’s poor farmers and workers.  The average income in a Chinese city is more than three times of someone living in the rural areas.

Premier Wen Jiabao stated that “resolving unfair income distribution” would be a priority for the country under its 5-year state economic plan.

With all these limitations on luxury advertising, will storefronts now become even more important for brand building in China?



photo credit: jocelyn saurini

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One Response to Beijing Puts a Damper on Luxury Ads

  1. Lux brands in China have been for long focused on building brand awareness through high expenditure on advertising and massive events, which was working very nicely till recently. On McKinsey last report on Luxury, it is highlighted the switch to a more individualitic consumption behaviour, which will certainly raises the importance to build up CRM programmes to respond to the growing demand to a more customer-centric approach rather than product-centric.

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