Price tags have magical allure for China's new rich
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[By Liu Rui/Global Times] |
In the 1980s, my uncle, a professor at China's Capital Normal University, spent some time in New York as a visiting scholar. Before he went back to China, he went to Manhattan's Fifth Avenue with plans to buy a gift for his wife.
The only problem was that the lowest priced item was still several times his annual salary. He ran off after getting a warm welcome targeted at Japanese customers but only cold stares when he told the shop assistants he was from China.
I heard the story when I was still a kid and was so traumatized by the thoughts of such humiliation that I didn't set foot in any store on Fifth Avenue in the first 10 years I lived in New York City. It was only my research for this piece that finally got me to gulp hard and walk into some of those boutiques.
I didn't really look at the prices but I paid close attention to the attitude of the sales assistants. I was greeted with "ni hao" (Hello) in several shops. It is clear that being Chinese these days gets you very bright smiles. It almost made me feel I had shamed the Chinese people by not buying anything.
This is not a surprise given that China is now the second biggest luxury goods market in the world with 15 percent of sales and is predicted to overtake the US as No.1 with a 50 percent share in 10 years.
But what catches as much attention is not only the rapidly growing purchasing power of Chinese people but the motivation behind this frenetic tide of luxury buying.
"The Chinese middle class don't feel they are middle class. They feel they are on the way to become the richest. They go for the best items to show their status," said Shaun Rein, founder of the Shanghai-based China Market Research Group, at a recent Bloomberg China Investment Strategies Conference in New York.
This worries intellectuals and commentators alike. The mainstream Chinese media has put a lot of efforts into calling for more mature and logical consumption. Buying only for showing off, they point out, will lead to waste and greed, which have always been condemned in traditional Chinese culture.
It's a reasonable concern. But perhaps we shouldn't blame the newly minted rich without examining the roots of the problem.
When Chinese buy a brand name item, they like the logo to be shown clearly, while Americans mostly prefer it to be low-key.
During the recent financial crisis, some of the rich in the US even felt embarrassed about shopping in high-end stores, forcing the shops to use unmarked shopping bags to protect their customers' anonymity.
When receiving gifts from friends, Americans like to judge the quality of the friendship by the time the giver likely spent on choosing the gift, and Chinese like to judge by the price.
When a Chinese company gets listed on the New York Stock Exchange, a lunch for reporters usually contains multiple courses. When an American company does so, it's more likely to be a combination of cold salads and sandwiches.
And when an American gets married, friends may put 20 or 40 bucks into a pool for the wedding gifts. The standard contribution for Chinese, even for those who have been in the US for a long time or for those who still owe hundreds of thousands of dollars in fees to the snakeheads that brought them in, is at least a hundred dollars.
Some of this may have nothing to do with showing off. It could be sincere hospitality. But the signature Chinese concept of "face" is never far away. Chinese tend to use the price tag as a single measurement, for friendship, for success, for social status, and for love.
Other countries that are quickly shaking off past impoverishment have the same problem. India, for example, is considering introducing legislation to curb lavish wedding expenses among its people.
It's debatable whether it is necessary to use the law to change social behavior that is not directly harmful to others. But it might be more effective to raise the awareness that when a country is no longer poor, less can be the new more, and low cost can sometimes be priceless.
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