China are going up. For some that means a stop at the local fast food restaurant is affordable, for others, it has created a pension for brand names, expensive cars and glitzy jewelry.
McKinsey, a management consultancy, recently reported it expects China will account for 20 percent of the world's luxury goods in just four years. By then, it says, the luxury market could be worth 27 billion dollars.
Rapid increases in wealth, and shifting social mores that sanction the display of that wealth, are driving a growing infatuation for luxury goods among Chinese consumers.”
“Access to an explosion of information on the Internet, an increasing penchant for overseas travel, and first-hand experience purchasing and consuming luxury goods are contributing to a substantial rise in sophistication among luxury consumers in China. Contrary to popular belief, a growing number of Chinese luxury consumers are exhibiting a noticeable trend away from overt displays of wealth, and towards more understated forms of luxury consumption.”
“Rapid urbanization and growing wealth outside of China’s largest cities is driving the emergence of several new geographic markets with sizeable pools of luxury goods consumers. Over the next 5 years, [McKinsey] expects that the number of such cities will double from 30-60.
Ushering into 2011, China, serving as a niche market, is more than just prosperity. It is believed that China’s luxury market has transformed from ‘land-rush’ to ‘ROI focus’. It is urgent for key market players to have in-depth knowledge of ‘China’s rule’. How to cultivate specific brandculture catering to local consumers? How to efficiently build brand image and grant to consumers? What is the ideal retailing solution for variant consumers? How to do ideal CRM in a niche market? It is certain that luxury consumption in China is more than purchasing but purchasing culture, spirit, life sytle of luxury brands.
Core luxury buyers: Affluent households that spend 12 to 20% of their income on luxury goods per year ($22,000 to $66,000).
Luxury role models: Young and fashionable, most are self-employed or corporate executives living in Beijing or Shanghai. They buy to indulge themselves and seek to feel unique rather than show off their wealth.
Fashion fanatics: Middle class, typically in junior to mid-level positions; includes some housewives. They spend a disproportionate amount of income on luxury, and have a stronger “enjoy now” mindset, willing to buy on credit. They also exert a strong influence on other consumers, sharing their purchases and opinions in social circles and online.
Middle-class aspirants: Middle class living in Tier 2/3 cities. They are infrequent buyers of luxury products. Purchasing luxury goods makes them feel successful and fulfills aspirations of belonging in a higher social circle. They are also less knowledgeable about luxury brands and thus are more cautious spenders.
