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Luxury lures China's young wealth
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With rising consumption power, Chinese consumers are searching for a higher quality of living. Many are looking to luxury products for this fulfillment. In the second episode of our special series on China's luxury market.
Cathy Zhang is walking in a shopping mall in Beijing, thinking of buying a Cartier or Omega watch for herself as a gift for the National Day Holiday.
Cathy Zhang, Luxury consumer in Beijing "If there is a special occasion, like my birthday, Christmas, Chinese New Year, or when I receive a bonus from my boss, I will buy some to treat myself. "
Cathy says she's not a crazy buyer of luxury goods. She makes the purchase once in every 2 or 3 month, spending around 10 thousand dollars a year. That's almost a quarter of her annual income. So does it really worth it?
Cathy Zhang said "It definitely worths it. I think you can use it for a longer time. When you are using it, you can appreciate its quality and design. "
Cathy is one of China's 250 million middle class elite that can afford various luxury products. According to Goldman Sachs, abound one million are active buyers, spending 7 billion US dollars a year.
Bruno Lannes, a partner of consulting company Bain, says a legion of young luxury consumers is rising at a dizzy speed in China. In the past three years, income among the post 80's grew 34 percent. And without a generation before them to refer to style-wise, young consumers are daring with the choices they make.
Bruno Lannes, Partner of Bain & Company said "You don't need to wait until 40-or-50-years old to discovery luxury brands. There's no reason for that. You can do that at 25, even with your first salary. Why not. That gives you the taste of what it is and what you can hope for in the future."
Mr. Lannes also notes, in China, luxury goods are consumed on a mass level, and are not confined to a select few, in terms of not only age, but also geography.
In a shopping mall in Ji'nan, the capital city of the wealthy Eastern Province of Shandong, luxury goods users can be easily spotted.
Miss Pan, Jinan resident said "Of course China is a luxury consumption power. It matches its economic position in the world. "
Ms. Li, Jinan resident said "If financially allowed, buying luxury goods is understandable. They are symbols of social status. "
Mr. Huo, Jinan resident said "When I got rich, I'd like to consumer some. Because those products indicates social status, which is desirable for a man."
Luxury products indicate social status, that's in line with the observation of Rupert Hoogewerf, better known as Hurun in China for his China Rich List.
Rupert Hoogewerf, Publisher of Hurun Report said "Chinese people's purchase of luxury products is status-driven..."
Status driven? The fashion-savvy Cathy Zhang in Beijing does not agree. She says now so many people buy luxury goods. She and her friends have already grown out of being showy or swanky. She thinks luxury means taste.
Cathy Zhang, Luxury Consuer in Beijing said "Probably taste, but not social status. And luxury products, the design and texture of bags, scarf, watches, their taste match my taste. There's always something behind it what makes you happy... makes you think you are a happy person."
Whether luxury merchandise mean social status or personal taste, at the core of the conspicuous consumption is the honest pursuit of better living conditions. International luxury brands perfectly fulfilled the needs of Chinese consumers from all angles, economic, social and cultural. That attributes for a more modern, powerful, and self-confident approach to life.
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