Already Numbering Over 100 Million, The Chinese Middle Class Is Powering China’s Luxury Market
Luxury brands like Louis Vuitton often employ larger-than-life marketing techniques in the Chinese market, as their Shanghai location reflects
China’s luxury market has gained a lot of attention this year, mainly because it remains one of the few global markets where more luxury retailers are entering the market, rather than cutting back or leaving it altogether (as we’ve seen by more than one luxury retailer in Japan this year). Although a good deal of luxury spending in China comes from the country’s small percentage of free-spending ultra-rich (who now number 143,000 RMB multimillionaires and 8,800 RMB billionaires in Beijing alone), as we’ve discussed before, many of China’s ultra-rich prefer to do their luxury shopping overseas — where Mainland China’s notorious luxury tax can’t bite them.
For China’s still-new but growing middle class, foreign travel, or trips over the border to Hong Kong, remain a luxury that most can’t fit into their schedules or afford. It’s this group that luxury marketers are increasingly identifying as the future of the Chinese luxury market. They’re not rich, but they’re willing to spend what they make on luxury goods.
From Investment U:
An important point here is the youthful nature of the Chinese middle class luxury shopper. In terms of demographics, the target market is a female, in her mid-twenties, college-educated, and in first- and second-tier cities.
While the number of young people in China who can afford top luxury goods is formidable, it is admittedly only a segment of a segment of this age group, as it is in most global markets. However, what makes them remarkable in China is the speed at which they have not only found and stuck with the brands they like, but have become immensely influential to marketers and designers around the world.
Ding Wenlei, writing for the Beijing Review, looks into the importance of the Chinese luxury market to global brands, who are looking to “glocalize” their products for emerging markets in China and India:
The article goes on to spotlight the young generation of Chinese luxury shoppers, pointing out that children born in the 1980s were really the third generation to emerge as shoppers in the global sense of the word following China’s market reforms of the late 1970s: