Selling luxury goods in China has a different dynamic than marketing in the West, tells advertisement guru Tom Doctoroff in The Fast Company. “The product is a means to an end.” Chinese consumers need a good reason to buy.
In the fifteen years since DeBeers entered the market, the penetration of diamond engagement rings has risen from 8 percent to 80 percent. The company achieved this by understanding that marriage is perceived differently among Chinese than Westerners. While the latter like to believe that passion and romance last forever, the former see commitment as persistent, not love as such. De Beers gave the Chinese man a tool to demonstrate his reliability.
Most Chinese consumers are still loath to purchase expensive foreign appliances because they are used only at home and the quality of local brands is acceptable. However, products that have high visibility or can be displayed have made great strides. Siemens, despite an average price premium of 40 percent versus Haier, is the second largest refrigerator brand after Haier.
The bottom line is that the product is a means to an end. The Chinese have no excuse for buying luxury goods, given their level of income, but luxury is so externalized it enables inconspicuously conspicuous consumption–that is, the ability to show off without being seen to do so. It is all about convincing consumers that the product will help them climb the social ladder. If there is a craftsmanship to selling products in China, it’s communicating how a product will help the owner solidify status while avoiding clichés.
Tom Doctoroff is the author of the recently published book “What Chinese Want: Culture, Communism and China’s Modern Consumer“. More on Tom Doctoroff and his book on Storify.