China’s love of contemporary culture and expensive brand labels has seen a nation of Chinese tourists heading overseas toward London, New York and Paris for global fashion hotspots. Luxury brands such as Chanel, Rolex and Lacoste have captured the hearts of China’s post-80s generation who see western culture as a beautiful and glamorous lifestyle. At present, China is the second largest consumer of luxury goods consuming 27.5% of luxury products in the world. 

The Chinese Luxury Consumer

In the late 70s, Chinese economic reform began opening foreign direct investment in the mainland increasing western brand presence in China. Growing investment from families following the one-child policy also helped push overseas education which has played a pivotal role in creating brand awareness among doe-eyed Chinese youths.

Luxury brands have come to value China for its supply of youthful high-end consumers, where currently 75% of luxury purchases are from people under the age of 40. This is in stark contrast to the dominant senior adult consumer demographic in developed countries (China Decoded, 2010).

Opportunity for Luxury Brands in China (Ronald Degan, 2009)

China is home to 875,000 millionaires with an average age of 39 years old; living in the richest cities of Beijing, Guangdong and Shanghai. Generally, those with money like to wear their wealth on the outside in order to reflect higher status and ‘Face’; the Asian concept of pride and dignity. The middle class are modest but they still like to feel unique and consider luxury brands as a good way to set themselves apart from others.

Luxury Purchases Start with the Wristwatch

In China, there are over 200 domestic and import watch brands, 60% of these brands are imports belonging to labels including: OMEGA, RADO, LONGINES, ROLEX, TISSOT, TUDOR, TITONI, ENICAR and CITIZEN (Alibaba, 2009).

Asia was the world’s largest market for Swiss watches in 2009, receiving 48% of Swiss exports. As it stands, Swiss wristwatches account for 99.6% of high-end wristwatches in China and the outlook for jewellery and watch suppliers in the China market are very optimistic. With China already proving its ability to bounce back during the economic downtown, insiders predict that within the next five years China will eclipse Japan to become the world’s largest luxury market.

The Importance of Creating Brand Value

Wristwatches are regarded as the as the entry point for further luxury purchases, this is a very important stage for fashion labels because the wristwatch has the ability to instil lifetime brand loyalty in the buyer (China Luxury Panel; Valerie Seckler, 2009). Chinese affluent customers only select the most famous luxury brands and are unwilling to invest in unknown ones despite signs of good craftsmanship, therefore, luxury labels need to possess high brand awareness in order to drive buyer demand toward their fashion products.

China’s Luxury Brand Market in the Future

China’s luxury market will soon become crowded with not only foreign brands but also Chinese brands. Shanghai Watch, China’s first high-end watch company has already reinvented themselves into a nostalgic watch company with a modern Chinese twist. With the stigmas toward China’s low quality goods set to fade, as with Japan in the 1970s, consumers will feel a growing patriotism toward home-grown brand labels; something foreign companies cannot replicate. Therefore, foreign luxury brands must already hold brand presence in Asia or be heading into the market soon in order to establish a successful international label (Latecomers such as Apple are still arriving into the China marketplace).

Looking into the future, the median age of Chinese people will mature beyond that of the United States by 2025. A combination of modernisation and the one-child policy will influence China’s slowing population growth; the average age of China’s wealthy will also mature to that of developed countries. Louis Vuitton has already shifted their target market toward the emerging middle-class shopper which is expected to become the next profitable market for luxury brands.

Article Provided for Ren Media

 

China’s love of contemporary culture and expensive brand labels has seen a nation of Chinese tourists heading overseas toward London, New York and Paris for global fashion hotspots. Luxury brands such as Chanel, Rolex and Lacoste have captured the hearts of China’s post-80s generation who see western culture as a beautiful and glamorous lifestyle. At present, China is the second largest consumer of luxury goods consuming 27.5% of luxury products in the world.

The Chinese Luxury Consumer

In the late 70s, Chinese economic reform began opening foreign direct investment in the mainland increasing western brand presence in China. Growing investment from families following the one-child policy also helped push overseas education which has played a pivotal role in creating brand awareness among doe-eyed Chinese youths.

Luxury brands have come to value China for its supply of youthful high-end consumers, where currently 75% of luxury purchases are from people under the age of 40. This is in stark contrast to the dominant senior adult consumer demographic in developed countries (China Decoded, 2010).

Opportunity for Luxury Brands in China (Ronald Degan, 2009)

China is home to 875,000 millionaires with an average age of 39 years old; living in the richest cities of Beijing, Guangdong and Shanghai. Generally, those with money like to wear their wealth on the outside in order to reflect higher status and ‘Face’; the Asian concept of pride and dignity. The middle class are modest but they still like to feel unique and consider luxury brands as a good way to set themselves apart from others.

Luxury Purchases Start with the Wristwatch

In China, there are over 200 domestic and import watch brands, 60% of these brands are imports belonging to labels including: OMEGA, RADO, LONGINES, ROLEX, TISSOT, TUDOR, TITONI, ENICAR and CITIZEN (Alibaba, 2009).

Asia was the world’s largest market for Swiss watches in 2009, receiving 48% of Swiss exports. As it stands, Swiss wristwatches account for 99.6% of high-end wristwatches in China and the outlook for jewellery and watch suppliers in the China market are very optimistic. With China already proving its ability to bounce back during the economic downtown, insiders predict that within the next five years China will eclipse Japan to become the world’s largest luxury market.

The Importance of Creating Brand Value

Wristwatches are regarded as the as the entry point for further luxury purchases, this is a very important stage for fashion labels because the wristwatch has the ability to instil lifetime brand loyalty in the buyer (China Luxury Panel; Valerie Seckler, 2009). Chinese affluent customers only select the most famous luxury brands and are unwilling to invest in unknown ones despite signs of good craftsmanship, therefore, luxury labels need to possess high brand awareness in order to drive buyer demand toward their fashion products.

China’s Luxury Brand Market in the Future

China’s luxury market will soon become crowded with not only foreign brands but also Chinese brands. Shanghai Watch, China’s first high-end watch company has already reinvented themselves into a nostalgic watch company with a modern Chinese twist. With the stigmas toward China’s low quality goods set to fade, as with Japan in the 1970s, consumers will feel a growing patriotism toward home-grown brand labels; something foreign companies cannot replicate. Therefore, foreign luxury brands must already hold brand presence in Asia or be heading into the market soon in order to establish a successful international label (Latecomers such as Apple are still arriving into the China marketplace).

Looking into the future, the median age of Chinese people will mature beyond that of the United States by 2025. A combination of modernisation and the one-child policy will influence China’s slowing population growth; the average age of China’s wealthy will also mature to that of developed countries. Louis Vuitton has already shifted their target market toward the emerging middle-class shopper which is expected to become the next profitable market for luxury brands.

Article Provided for Ren Media

 

China’s love of contemporary culture and expensive brand labels has seen a nation of Chinese tourists heading overseas toward London, New York and Paris for global fashion hotspots. Luxury brands such as Chanel, Rolex and Lacoste have captured the hearts of China’s post-80s generation who see western culture as a beautiful and glamorous lifestyle. At present, China is the second largest consumer of luxury goods consuming 27.5% of luxury products in the world.

The Chinese Luxury Consumer

In the late 70s, Chinese economic reform began opening foreign direct investment in the mainland increasing western brand presence in China. Growing investment from families following the one-child policy also helped push overseas education which has played a pivotal role in creating brand awareness among doe-eyed Chinese youths.

Luxury brands have come to value China for its supply of youthful high-end consumers, where currently 75% of luxury purchases are from people under the age of 40. This is in stark contrast to the dominant senior adult consumer demographic in developed countries (China Decoded, 2010).

Opportunity for Luxury Brands in China (Ronald Degan, 2009)

China is home to 875,000 millionaires with an average age of 39 years old; living in the richest cities of Beijing, Guangdong and Shanghai. Generally, those with money like to wear their wealth on the outside in order to reflect higher status and ‘Face’; the Asian concept of pride and dignity. The middle class are modest but they still like to feel unique and consider luxury brands as a good way to set themselves apart from others.

Luxury Purchases Start with the Wristwatch

In China, there are over 200 domestic and import watch brands, 60% of these brands are imports belonging to labels including: OMEGA, RADO, LONGINES, ROLEX, TISSOT, TUDOR, TITONI, ENICAR and CITIZEN (Alibaba, 2009).

Asia was the world’s largest market for Swiss watches in 2009, receiving 48% of Swiss exports. As it stands, Swiss wristwatches account for 99.6% of high-end wristwatches in China and the outlook for jewellery and watch suppliers in the China market are very optimistic. With China already proving its ability to bounce back during the economic downtown, insiders predict that within the next five years China will eclipse Japan to become the world’s largest luxury market.

The Importance of Creating Brand Value

Wristwatches are regarded as the as the entry point for further luxury purchases, this is a very important stage for fashion labels because the wristwatch has the ability to instil lifetime brand loyalty in the buyer (China Luxury Panel; Valerie Seckler, 2009). Chinese affluent customers only select the most famous luxury brands and are unwilling to invest in unknown ones despite signs of good craftsmanship, therefore, luxury labels need to possess high brand awareness in order to drive buyer demand toward their fashion products.

China’s Luxury Brand Market in the Future

China’s luxury market will soon become crowded with not only foreign brands but also Chinese brands. Shanghai Watch, China’s first high-end watch company has already reinvented themselves into a nostalgic watch company with a modern Chinese twist. With the stigmas toward China’s low quality goods set to fade, as with Japan in the 1970s, consumers will feel a growing patriotism toward home-grown brand labels; something foreign companies cannot replicate. Therefore, foreign luxury brands must already hold brand presence in Asia or be heading into the market soon in order to establish a successful international label (Latecomers such as Apple are still arriving into the China marketplace).

Looking into the future, the median age of Chinese people will mature beyond that of the United States by 2025. A combination of modernisation and the one-child policy will influence China’s slowing population growth; the average age of China’s wealthy will also mature to that of developed countries. Louis Vuitton has already shifted their target market toward the emerging middle-class shopper which is expected to become the next profitable market for luxury brands.

Article Provided for Ren Media

 

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