Chinese consumers still buy luxury goods, despite a relative economic dip, says business analyst Shaun Rein in the New York Times. But their preferences are shifting and diversifying, depending on demographics and spending power.
The New York Times:
“When we talk to Chinese consumers, they absolutely want to spend on luxury, but there is also a definite shift,” said Shaun Rein, managing director of China Market Research Group, a consulting firm.
“We recently interviewed three dozen Chinese worth $10 million each or more, and they told us they don’t want Louis Vuitton any more because it’s become too common,” he said by telephone from Shanghai. “They are trying to differentiate themselves and not have the same logos and the same brands that have been so popular for the last ten years.” The handbag buyer, he said, favors “Hermès, Chanel, a Bottega Veneta — brands that have high prestige but are a little bit more low-key.”
The luxury market is also fragmenting by demographic and spending power, Mr. Rein said…
Mr. Rein added that at the ultrahigh end, consumers were no longer getting prestige from a handbag, “They are looking at Ferrari and Lamborghini cars, private jets and yachts and you are seeing those markets still grow significantly,” he said…
But as brands set up new boutiques in China to capture the domestic consumer, they may be overlooking an important shift in luxury buying patterns: The Chinese are, by and large, not shopping at home…
“A lot of luxury brands look at pure economic data, see Beijing and Shanghai as the cities where the wealthiest are, and so decide to set up a flagship store there,” Mr. Rein said. “The reality is that people in Beijing and Shanghai do very little luxury shopping in China because they travel abroad more, and right now it’s much better value for them to buy in Europe as prices have not increased there, while the euro has fallen.” The real growth, he said, is going to come from smaller cities.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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