Luxury market in China shifts from officials to young professionals

Luxury market in China shifts from officials to young professionals

Xinhua

2013-12-28

Though China’s current anti-extravagance drive is hitting luxury sales hard, the market is still huge, especially with smart and increasingly fashion-savvy consumers.According to a recent report by US consulting firm Bain and Company, the growth of luxury sales has slowed, however, Billy Ip, the manager of Seasons Place luxury shopping mall in downtown Beijing, still believes the prospects for the luxury market are rosy.

With the increasing affluence of ordinary Chinese people, luxury consumption will gradually become a lifestyle choice instead of just a means of showing off wealth, Ip said.

Luxury consumption by Chinese people around the world is expected to reach US$102 billion this year, accounting for 47% of global luxury sales, according to a report by the Fortune Character Institute, a part of the Fortune Character media group in Shanghai.

Zhou Ting head of the Fortune Character Institute said that with the anti-graft and frugality campaigns, the luxury market will rely more on entrepreneurs and white-collar workers in cities.

“These groups of consumers will be more rational in luxury purchases. They are looking for things that are worthwhile and are willing to spend money on items with better quality, rather than sheer displays of wealth,” she said.

Many Chinese people got their first taste of the international fashion world in 1979, when French designer Pierre Cardin held the first fashion show in China.

Well-known luxury labels in China also include Chanel, as well as Prada, which rose to meteoric fame after the release of the hit movie The Devil Wears Prada in China in 2007.

Zhou said, however, that Chinese consumers’ fashion taste will become more diversified in the future.

Li Jing, a 33-year-old dedicated follower of fashion in a city in eastern China’s Jiangxi province, said that after having bought quite a few expensive items, she is no longer obsessed with the famous LV monogram on Louis Vuitton bags.

“Instead of the big names, now I would like to look for luxury goods that cost me less but suit me more,” she said.

An increasing number of Chinese customers are also turning to custom-tailored products, according to Zhou.

Ip said the bestselling products in the market are “light luxury” items that cater to upscale consumers between the ages of 25 and 35, and that this part of the market will not be directly affected by the anti-graft campaign.

Big brands are still a huge magnet for younger Chinese, however. To celebrate her 24th birthday, Kitty Han, a graduate student in Beijing, spent about 400 yuan (US$66) and bought herself some Armani foundation, the first luxury brand item she has ever owned.

Although having a luxury brand makes her happy, Han said the purchase was not merely out of blind admiration.

“I need decent make-up when I am hunting for a job, and I’ve learned from the internet that this product has a sound reputation among users,” she said.