The Olympics may be long past, but the results have just been announced for one event that wasn’t even televised: luxury spending. The Chinese spent the most abroad on luxury purchases during the games, $255 per purchase on average. The United Arab Emirates, despite years of training, were outspent by the Chinese by 10 percent.
What is most astounding about this trend is just how young the Chinese team of luxury shoppers is. Whereas the big spenders in most other countries are snowbirds who have already earned their fortunes, a majority of Chinese luxury buyers are between 25 and 35 years old. Though on average they pull in just $1,570 a month, young buyers spend an average of 40 percent of their income a year on flashy purchases, thanks in part to financial assistance from family or services like subsidized housing.
The spending is fueled by the desire for status: young college grads scaling the social and corporate ladder want to be sure they appear in the finest form with the help of the highest quality goods available. Public servants especially are keen to always appear at their best.
Cathy Zhang, a young luxury shopper in Beijing, is attracted to the design and texture of very fine merchandise when making purchases. There’s always something behind it that makes you happy, makes you think you are a happy person,” she explains.
Some sociologists and economists are not very excited about this victory for China – they look to countries like the United States where high living led to higher housing prices, bankruptcy, and the fall of an entire economy.
For now though, the Chinese luxury buyers are still exercising their purchasing power.