Watches, a status symbol for Chinese men, have been an important growth driver for China’s luxury market, but handbags could be the “heir apparent.”
China’s luxury goods market is still dominated by male consumers, but more women are gaining greater financial independence and buying power. As we reported in September, the white-collar “aspirational” woman consumer is the fastest-growing group in China, and could account for about 60 to 70 percent of the overall market.
Handbags, through the ages, are one of the key accessories completing women’s wardrobes.
For women, handbags are their status symbol — an accessible status symbol. “Your handbag says as much about you as the car you drive: it’s intensely personal. And while a woman’s choice of handbag is probably something that most men don’t consciously notice, other women clock immediately,” said Osprey founder Graeme Ellisdon.
“Handbags work as ‘markers': given their recognizable shape, design patterns and – in many cases – visible logos, consumers can use them to ‘tick the box’ and show that they ‘belong’. I see no other product category that can provide this function so effectively for women,” said Sanford Bernstein senior retail research analyst Luca Solca.
Consumption, rather than production, is the driver in capitalist societies noted French theorist Jean Baudrillard. “He pointed to the symbolic value of an object – the value assigned to an object by society – and its ‘sign value’ – its value within a system of objects. So while an expensive handbag has no added functional benefit over a cheaper model, what it says about the owner is priceless,” writes The Independent.
What trend can we expect from China’s luxury handbag market?
Some think only big logos do well in young luxury markets like China, but globalization could push Chinese women to become sophisticated buyers sooner than expected. “Globalization has meant the whole of the world follows the same trends,” says Mulberry’s chief executive, Godfrey Davis, “Now, the bestseller in New York and London is the bestseller in Hong Kong.”
The trend in luxury is understatement as people emerge from the global recession. The days of large designer logo and giant handbag may soon fade. In next month’s issue, style arbiter Vogue has proclaimed “the plain bag movement”, an indication that “it is no longer chic to flash big logo IDs or be weighed down by X-large bags. Sleek and unadorned were bywords for chic.” There is a shift towards genuine quality, hand-stitching and the best leathers. This bodes well for classic European brands in China’s luxury handbag market.
Luxury companies are excited at the growth prospects because luxury handbags are only a small part of the luxury sector, under-penetrated in most markets, except Japan, and extremely lucrative.
photo credit: mulberry