China’s wealthy class is coming into its own as a huge luxury goods consumer market— while conspicuous consumption is prevalent, for now, many are also staying hush-hush. Perhaps, not wanting to invoke societal wrath or some of China’s wealthy simply are becoming more sophisticated.
According to Zhao Ping, an economist at the Chinese Academy of International Trade and Economic Cooperation: “The rich people have less political or social influence in China, and it takes time for society to prepare psychologically for the appearance of the super rich.”
In part, the reluctance of most Chinese to approve of super-consumerism may be due to the phenomenally rapid increase in luxury goods consumption in China. In 1998, the Chinese spent less than one billion dollars on luxury goods. In 2008, just ten years later, China’s luxury spending registered at $8.4 billion—well over an 800 percent increase. In the next two years spending increased almost 50 percent, reaching $12.25 billion in 2010. Luxury goods figures are projected to reach 26.7 billion by 2015.
China outstripped the U.S. in 2009 to claim the world’s second-largest luxury market, exceeded only by Japan. Chinese predict that it won’t take long before they’ve outpaced the Japanese market as well.
In fact, the recent Japanese earthquake and tsunami may help China nab first place sooner than anticipated. Media reports indicate that many luxury brands with an international presence are looking to expand to China in an effort to make up for their losses in the wake of the Japanese natural disasters. As a staff member of one Japanese luxury company said: “Nobody wants to buy luxury goods after disasters.”
Brands looking to move into China will find a welcome reception, as local Chinese shopping malls strive to entice big-name brands to move into their locations. And while in the past, Chinese purchased 60 percent of luxury goods overseas, Chinese malls and online stores are paving the way for a more domestically-oriented future.
“In the future, more Chinese luxury goods shoppers will shop not far from their home,” Zhao said.
But whether they are shopping close to home or far away, one thing is certain: Chinese consumers are beginning to focus on the shopping experience as much as on the products they are buying — a growing sign of sophistication.
“Rich Chinese will no longer be satisfied ordering a limited edition of a luxury bag,” said Zhao. “They are learning how to play in a more fashionable way. They are becoming much more concerned about the consumer experience and after-sale service for luxuries.”
This focus on experience over product was perhaps most clearly demonstrated earlier this month, when 250 wealthy Chinese from across the nation jetted to Sanya on Hainan Island for a luxury goods exhibition that included 150 exhibitors showing yachts, private jets, and other big-ticket luxury toys. Attendees arrived on the island in private jets and were chauffered to the event in BMWs, including M3s and Gran Turismo.
But ostentatious events like this are only one facet of increased Chinese spending. On the mainland, the adult children of wealthy Chinese are becoming the new VIPs of luxury goods consumption. Cui Tiantian is one such young consumer. The 28-year-old is married with a small child, but her husband provides financial stability, and Cui’s parents care for their child. And in her free time, Cui likes to spend.
Cui once read a top 100 list of luxury goods for women in a lifestyle magazine, and that list inspired her to make one of her own. And Cui has the resources to make this dream list a reality. Last year, she purchased a Louis Vuitton bag, thrilled to know that it was “limited-edition.”
“My happiest moment is to delete one item off my list,” Cui said.
photo credit: imageinelifestyles