Why do China people flock to luxury goods?

On the one hand, the per capita GDP of this country ranks 94th in the world-after Jamaica and Bosnia; On the other hand, China is expected to replace Japan and the United States and become the largest luxury market in the world. Faced with this seemingly contradictory phenomenon, the handy explanation is that people's living standards and income levels have risen with the development of the economy, and a large number of millionaires and billionaires have emerged. However, it is not only people's spending power that boosts China's $654.38+02 billion luxury market. Like other random purchases, retail experts believe that in China, buying big-name fashion, jewelry and other high-end products is particularly driven by emotions, culture, social values and some "political concepts". Professor Lu Xiao, an expert in luxury market research at Fudan University, believes that China's consumer culture is a melting pot of values. It contains a strong value orientation of pursuing "modernity, wealth and success". These values are based on two factors: socialism after 30 years of reform and opening up and the rise of western forces. Deng Xiaoping, who initiated this economic reform, once famously said, "Let some people get rich first". "All of a sudden, the flat social structure of this country has expanded vertically. In order to show that they are different from the success of the western style, people are eager for wealth and modernity and admire them. The mainstream story of modern China is a higher level of social status and economic status-whether it is this country or individuals. " Lu Xiao said. People's love for luxury goods echoes the background of this grand narrative. "Luxury goods have become the most effective way to evaluate the success of China society," said PG One, CEO of Maxi Fashion Network (Meici.com), an online luxury goods store in Shanghai. "As a populous and densely populated country, China is a very competitive society. At the same time, being recognized by society is a basic need of people. " So, how can people stand out in this competitive environment? According to PG One, China people's interest in luxury goods today is similar to that of Europeans in the period when Europe gradually moved towards a capitalist society a century ago. Get up, get up ... "Compared with other countries with more distinct social classes, China's social class structure is flat, and all the money is' (new money'), which makes everyone stand on the same starting line and achieve a successful relatively equal." Ashok Sethi, head of the consumer research department of TNS, a market research organization, said. In Xiao's words, the absence of class differences means that China "has no" (anti-snobbery) and (old money) look down on the arrogant (new rich) group. The existence of the latter will not buy luxury goods, and will regard casually dressed and moderately priced products as fashion. He believes that "the existence of this group in developed countries restricts the development of luxury goods, but this force is not climate in China, so it is not enough to hinder people's pursuit of luxury goods." And this one-way force causes more distortion. According to a report released by McKinsey earlier this year, "middle class aspirants" (that is, groups eager to enter the middle class) have become a rapidly growing part of luxury consumption in China. This group, which is dominant in quantity, must save money to afford luxury goods. Judging from the income level, they have no chance to buy expensive luxury goods. Although these people do not buy frequently, they only account for 10% of the total luxury consumption, but they account for 5 1% of the luxury consumption groups. McKinsey predicts that by 20 15, 6 1% luxury consumers will come from this class, and their consumption will account for 16% of the national luxury goods sales of $27 billion. People who are eager to improve their social status will be greatly influenced by richer and more fashionable consumers, whose number is doubling. McKinsey consultants believe that by 20 15, the number of upper-middle class families with annual income of 654.38 million yuan (15400 USD) to 200,000 yuan (30,800 USD) will reach 76 million from 1300 USD. The number of wealthy families whose annual income is between 300,000 yuan and 6,543,800 yuan will increase to 5.6 million at an annual rate of 654.38+05%, and the number of wealthy families whose annual income exceeds 6,543,800 yuan will increase to1million at an annual rate of 20%. Vinay Dixit, senior director of McKinsey Asia Consumer Center, said that attention should be paid to the aspiring young generation in China. "They grew up in an environment where consumerism prevailed. They are optimistic about future income growth. Besides, they are all only children. What's more, their purchase behavior may be supported by their parents and grandparents, so young people in China actually have three generations of resources. This is the characteristic of China. " Di Wei Rui said that although the per capita savings rate in this country is higher than that in other countries, the growing optimism and hedonism make the middle class more willing to spend money on luxury goods. "People have this mentality:' I will reward my efforts now, not wait 30 years later.' Now, luxury retailers have begun to realize the importance of consumer purchasing power in smaller second-and third-tier cities. Bain &; Company) said that in 20 10, 67% of the growth of luxury goods sales in China came from new consumers, especially those outside the first-tier cities. This result has a great influence on the growth strategy of retailers. Bain pointed out in a report: "The market in China is a supply-driven market, and the opening of new stores will create new demand. "The company investigated 15 luxury brands and opened 80 stores in the first eight months of 20 10. Analysts predict that this trend will continue. McKinsey predicts that the income of residents aged 20 to 30 in non-first-tier cities is expected to reach a higher level, so that the number of consumers eager for luxury goods will continue to grow. Some observers are deeply worried about the rise of China element. They say that too many people in China regard luxury as a simple criterion to judge a person's quality without paying attention to some noble and immaterial qualities. PG One, who is in the luxury industry, believes that "when people judge their peers by their clothes, society will become too materialistic. However, this trend does benefit some business people. "Recently, at a luxury industry seminar held by China Europe International Business School in Shanghai, Bruno Lannis, a partner of Bain Capital, a private equity firm, said," Luxury goods are associated with history, tradition, art, culture and exquisite craftsmanship. In addition, luxury goods are exclusive and unique, and their connotation lies in quality and service. The problem in China at present is that many people buy luxury goods not for these reasons. On the contrary, they regard luxury goods as a status symbol, which is a misunderstanding of luxury goods. Lu Xiao of Fudan University said that in addition to social identity, many people in China regard luxury consumption as a part of seeking identity and influence in the modern world dominated by the West, because the West represents advanced technology, powerful influence and modern values, and most people in Chinese mainland are pursuing these values in any way they can find. "This is particularly prominent among the older generation who grew up during the Cultural Revolution. As a well-known "lost generation", they missed the opportunity to receive higher education and lived in a "cultural blank" environment aimed at completely smashing the history of China. Some critics say that now they should be responsible for the worst imitation of western style and influence in this country. These include an imitation Lafite manor in the suburbs of Beijing and a replica of the White House in rural Anhui. Some people in the "lost generation" who are now in their fifties have gained new wealth. " Lu Xiao said that they can afford luxury goods, but they often lack the elegance they deserve. They like to show off and have biased ideas about what is tradition and social identity, which also explains their extremely extravagant behavior. "Besides, what makes some consumers feel uneasy is that China lacks its own luxury brands. According to a survey by Bain Consulting, all the best-selling high-end fashion brands in China are from Europe, such as Chanel, Gucci and Louis Vuitton. However, Lu Xiao believes that luxury consumption is not new in China after all. For example, the tradition that people prefer high-end antiques can be traced back to the imperial era. " Isn't there a China brand that can provide the luxurious elements that can be found in the ancient culture of China? "Asked Lu Xiao. CLSA, a securities brokerage agency, recently released a report on the luxury market in China, which predicted that local luxury brands would eventually rise, especially those based on domestic materials such as jade, ceramics and precious wood. The report also pointed out that some things that would not be regarded as luxury goods in other parts of the world, such as Pu 'er tea and Hainan mahogany furniture stored for 80 years, have been sold at record prices in China. In response, international brands also launched localized products for consumers in China. According to McKinsey & Company's survey of more than 65,438+0,500 luxury consumers in 65,438+07 cities in China last year, one third of the respondents said that they prefer luxury goods specially designed for China. Among young people and the upper middle class, people's desire for luxury goods that have absorbed China's rich cultural and historical heritage is obvious, and some companies have responded to it. "For example, last year, the French fashion company Hermè s took the lead in launching the" Xia Shang "brand retail store with China elements, and these clothes were all made according to the designs of China designers. Complexity and Contradiction Using the method of psychological subdivision, Lu Xiao identified an important group of luxury consumers in his research. They hoped to attract people's attention, but at the same time they were conservative and unobtrusive. China's traditional culture advocates frugality and simplicity, and the social environment before the reform also encourages this concept. At that time, the society prohibited or even punished the expression of personality and the display of wealth. However, today, the old value orientation has been abandoned and replaced by values that believe in wealth and personal achievement. This contradictory value orientation is particularly obvious among consumers working in government agencies. In his research, Lu Xiao found that government officials who can afford luxury goods are less ostentatious in the environment of government departments than business people who can also consume luxury goods, and wealth should not be publicly displayed to others, nor should it be displayed to others. Products with conservative designs, such as ties, scarves, unmarked suits and handbags, are the most popular. "Just like developed countries, conspicuous consumption will gradually cool down as China consumers' curiosity about luxury goods gradually weakens. McKinsey & Company found that now, China consumers who consume luxury goods earlier do not like conspicuous big brands, and quality and cost performance play a more important role in their purchase decisions. " People's loyalty to brands has changed greatly. "