On the one hand, the country's per capita GDP ranks 94th in the world - behind Jamaica and Bosnia; on the other hand, China is expected to replace Japan and the United States as the world's largest luxury goods product market. Faced with this seemingly contradictory phenomenon, the readily available explanation is that people's living standards and income levels have risen with economic development, and a large number of millionaires and billionaires have emerged. However, the factors driving China’s $12 billion luxury goods market are not simply people’s spending power. Like other casual purchases, retail industry experts believe that in China, the purchase of big-name fashion, jewelry and other high-end products is particularly driven by emotions, culture, social values ??and certain "political concepts." Professor Lu Xiao from Fudan University, who specializes in luxury market research, believes that China’s consumer culture is formed by the “melting pot” of values. These include the strong value orientation of pursuing “modernity, wealth and success”. There are two factors that form the basis of these value orientations: socialism after 30 years of reform and opening up and the rise of Western forces. Deng Xiaoping, who launched this economic reform, once famously said: "Let some people get rich first." "Suddenly, the country's flat social structure expanded vertically. In order to use Western success to show that they were different, people flocked to and admired wealth and modernity. The dominant story of modern China is social status and a higher level of economic status - both for the country and for individuals," Lu Xiao said. People’s appetite for luxury goods plays harmoniously into the context of this grand narrative. “Luxury goods have become the most effective way to evaluate success in Chinese society.” Wang Hao, CEO of Meici.com, an online luxury store in Shanghai, said, “As a country with a large and dense population, China is a very competitive society. At the same time, being recognized by society is a basic human need. "So, how can people stand out in this highly competitive environment? Wang Hao believes that Chinese people’s interest in luxury goods today is very similar to that of Europeans a century ago, when Europe was gradually moving towards a capitalist society. Up, up... "Compared with other countries with more distinct classes, China's social class structure is flat, and all money is 'new money', which puts everyone on the path to success. They are on a relatively equal starting line," said Ashok Sethi, head of the consumer research department of TNS, a market research organization. In Xiao Shitian's words, the lack of class differences also means that China has "no 'inverted snobbery,' no 'old money' groups that look down on the 'new rich' who are showing off in the market." (Referring to wealthy families with a long history and ancestral property - Translator's Note). The latter will not buy luxury goods, and will regard casual wear and moderately priced products as fashion. "He believes. "The existence of this kind of group in developed countries has restricted the development of luxury goods. However, this kind of power is not a climate in China, so it is not enough to hinder people's pursuit of luxury goods." And this one-way force has caused more of distortion. A report released by McKinsey earlier this year stated that the "middle class aspirants" (those who aspire to enter the middle class) have become a segment that is growing very rapidly in luxury goods consumption in China. Stratified. This numerically dominant group must save money to afford luxury goods. Judging from their income level, they do not have access to expensive luxuries. Although these people do not purchase frequently and only account for 10% of the total luxury goods consumption, they account for 51% of the luxury goods consumer group. McKinsey predicts that by 2015, 61% of luxury consumers will come from this class, and their consumption will account for 16% of the country's $27 billion in luxury sales. People who aspire to rise in social status are greatly influenced by wealthier, more fashionable consumers, whose numbers are multiplying. McKinsey consultants believe that by 2015, the number of upper-middle-class families with an annual income between 100,000 yuan ($15,400) and 200,000 yuan ($30,800) will increase from 13 million to 76 million. The number of wealthy families with an annual income between 300,000 yuan and 1 million yuan will increase to 5.6 million households at an annual rate of 15%, and the number of wealthy households with an annual income of more than 1 million yuan will increase to 100,000 yuan at an annual rate of 20%. Millions of households. Vinay Dixit, senior director of McKinsey's Asia Consumer Centers, said that what should be focused on is China's ambitious young generation. "They grew up in an environment where consumerism is prevalent, and they are quite optimistic about future income growth. In addition, they are only children. What is even more different is that their purchasing behavior may be supported by their parents and grandparents, so, What Chinese young people actually have are the resources of three generations combined. This is a Chinese characteristic.

"Devere said that although the country's per capita savings rate is higher than other countries, increasing optimism and hedonism have made the middle class more willing to spend money on luxury goods. "People have such a Psychology: 'I want to reward myself for my hard work now, not in 30 years.' '" Now, luxury retailers have begun to realize the importance of consumer purchasing power in smaller second- and third-tier cities. Consultants from Bain & Company said that in 2010, China's luxury goods sales 67% of the growth came from new consumers, especially those outside first-tier cities. This result has a significant impact on retailers’ growth strategies: “China’s market is supply-driven. In the market, the opening of new stores will create new demand. "The 15 luxury brands surveyed by the company opened 80 stores*** in the first eight months of 2010. Analysts predict that this trend will continue. McKinsey & Company predicts that by the age of 20, non-first-tier cities will The rise of China is a trend that worries some observers, who say there is too much. of Chinese people regard luxury goods as a simple criterion for judging a person’s quality, rather than focusing on some noble, non-material characteristics. Wang Hao, who works in the luxury goods industry and works on the US West Network, believes that “when people use clothing to evaluate. When people are of the same age, society runs the risk of becoming too materialistic. However, this trend does benefit some business people. ” Recently, at a luxury industry seminar hosted by China Europe International Business School in Shanghai, Bruno Lannes, a partner at private equity firm Bain Capital, said, “Luxury goods are related to history. , tradition, art, culture and exquisite craftsmanship. In addition, luxury goods are also exclusive and unique, and their connotation lies in quality and service. The problem in China right now is that many people buy luxury goods for reasons other than these. Instead, they regard luxury goods as a symbol of their status, which is a misunderstanding of luxury goods. " Lu Xiao of Fudan University believes that in addition to its relevance to social identity, many Chinese people also regard luxury consumption as part of their search for identity and influence in the modern world dominated by the West. "Because the West represents advanced technology, strong influence and modern values, so most mainland Chinese are pursuing these value orientations in any way they can find. ” This is especially true among the older generation who grew up during the Cultural Revolution. Known as the “lost generation”, they missed the opportunity to receive higher education and lived in a world where In a "cultural void" that has completely shattered China's past, critics say they are now to blame for some of the country's worst imitations of Western style and influence, including a Lafayette home on the outskirts of Beijing. A fake Chateau de Maisons-Laffitte, and a replica of a White House in rural Anhui Province. “Some people among the lost generation, now in their 50s, have gained new wealth. "Lu Xiao said. "They can afford luxury goods, but they often lack the elegance they deserve. Their tendency to show off and their skewed ideas of what is tradition and social acceptance also explain their extremely extravagant behavior. "In addition, what makes some consumers uneasy is that China lacks its own luxury brands. According to a survey by Bain & Company, all the best-selling high-end fashion brands in China come from Europe, such as Chanel and Gucci. Gucci) and Louis Vuitton, etc. However, Lu Xiao believes that tracing back to its roots, China’s luxury consumption is far from a new thing. For example, people’s preference for high-end antiques can be traced back to the imperial era. Are there no Chinese brands that offer the elements of luxury that can be found in ancient Chinese culture? Lu Xiao asked. A recent report on China's luxury market released by securities brokerage CLSA predicts that local luxury brands will eventually emerge, especially luxury goods based on domestic materials such as jade, ceramics and precious wood. The report also pointed out that certain items that would not be considered luxury goods in other parts of the world, such as 80-year-old Pu'er tea and Hainan mahogany furniture, are already selling at record prices in China. In response, international brands are also launching localized products for Chinese consumers. A McKinsey & Company survey of more than 1,500 luxury goods consumers in 17 cities in China last year showed that one-third of the respondents said they were more Prefer luxury goods designed specifically for China. “The desire for luxury goods that draw on China’s rich cultural and historical heritage is evident among younger groups and the upper middle class, and some companies are responding to this. "For example, last year, the French fashion company Hermes took the lead in launching its "Shangxia" brand retail store with Chinese elements. These ready-to-wear garments are produced based on designs by Chinese designers.

Complexity and Ambivalence Using the method of psychological segmentation, Lu Xiao identified an important luxury consumer group in his research. They not only want to attract attention, but are also conservative and unobtrusive. Traditional Chinese culture prizes prudence and simplicity, a concept that was also encouraged by the pre-reform social environment, which prohibited or even punished expressions of individuality and displays of wealth. Today, however, the old values ??have been cast aside in favor of the values ??of wealth and personal achievement. This contradictory value orientation is particularly evident among consumers who work in government agencies. In his research, Lu Xiao found that government officials who can afford luxury goods are less ostentatious than business people who can also afford luxury goods. “In a government environment, wealth should not be openly displayed to others, nor should it be flaunted to others. Conservatively designed products such as ties, scarves, business suits and unlogged handbags are most popular. ” Just like in developed countries, as Chinese consumers’ curiosity about luxury goods gradually weakens, conspicuous consumption will also gradually cool down. McKinsey & Company found that Chinese consumers who started consuming luxury goods earlier are no longer fond of eye-catching big brands, and quality and cost-effectiveness play a more important role in their purchasing decisions. “There has been a significant shift in people’s loyalty to brands.

”