Luxury consumer behavior in Mainland China

Topics: China, Tang Dynasty, Culture of China Pages: 7 (2391 words) Published: January 23, 2015
Luxury consumer behavior in Mainland China: What exists behind the facade of new wealth?

By Pierre Xiao LU
China recently became the world’s second largest market for luxury goods with an annual increase of more than 30% in 2010, even surpassing Japan. Further estimates predict that China will become the largest upscale product and consumer goods market in the world. How does a country with an average GDP per capita of $3,800 USD, and classified behind 105 in the world ranking possess such a strong propensity for consuming luxury goods and products? Specifically, how does one make sense of Mainland Chinese luxury buyers and their respective consumer behavior? This article answers these strategic questions for foreign companies and marketers who are interested in the luxury industry in China, and for those who want to develop a greater understanding of one of the world’s largest market and its 1.3 billion consumers. “At the core of this paper is an explanation of Mainland China’s 21st century value system that can only have been shaped from the country’s rich history.” At the core of this paper is an explanation of Mainland China’s 21st century value system that can only have been shaped from the country’s rich history. Answering how China has become the buoyant socialist state economy it is today, is to shed light onto the country’s various economic, social, cultural and psychological histories. The history of luxury consumption in China is one of the country’s oldest. It remains deeply rooted into China’s cultural and sociological landscape and has subsequently influenced other Asian countries such as Japan, Korea, Vietnam, Thailand, Malaysia and Singapore. The contemporary Chinese antique market and auction houses offer a telling explanation of how luxury is consumed in China. During the economic downtown, collections of Chinese antiquities were sold at Christie’s auction house for far more than their estimated value. In 2009, a 12th-century B.C. bronze vessel from the Western Zhou Dynasty sold for over 14 times its estimated value. These antique collectors are, in large part, Chinese or Asian. Collecting an expensive, storied antique is viewed in a similar vein to purchasing a luxury good. To own an artifact at home was tantamount in grandeur to that displayed by museums around the world that also housed ancient Chinese art collections. In sharp contrast, during China’s Cultural Revolution from 1966 to 1976, tradition and Chinese cultural heritage was viewed negatively as something boring, worthless, and divisive. History and heritage were destroyed in favor of new equalizing ideology. The Cultural Revolution created a cultural void, and those affected would go on to be known as the ‘lost generation’. Currently in their 50s, some members of the ‘lost generation’ have attained new wealth. They partake  in the purchasing of luxury goods, and often lack subtlety. They are ostentatious and inherently possess a skewed view of what is traditional or socially accepted, subsequently explaining for very extravagant behavior. A few examples include the rebuilding of the Chateau de Maison Laffitte of Paris in a suburb of Beijing, or one wealthy man’s endeavors to build an exact replica of the U.S. President’s White House in a rural area of Anhui province. The underlying theme is the Mainland Chinese desire to mimic emblems of power from Western culture. “Today, the Mainland Chinese consumer’s 21st century value system is comprised of three salient parts: the traditional Chinese value system persists, the socialist Chinese value system (dominant), and the Western value system which is often regarded like a trend.” As the West represents advanced technology, super powers and modern values, the majority of Mainland Chinese seek to pursue these values the best they can. Therefore the pursuit of Western values can be said to have a strong influence on the Chinese consumer value system.

Today, the Mainland Chinese consumer’s 21st...

References: •  Michel Chevalier and Pierre Xiao Lu, Luxury China, Market Opportunities and Potentials, Wiley and sons, 2010
•  Jacques Gernet, Le Monde Chinois, Paris: Armand Colin, 1999
•  Alexandra Peers, What’s Still Recession-Proof, The Wall Street Journal, September 24, 2009
•  Pierre Xiao Lu, Elite China, Luxury Consumer Behavior in China, Wiley and Sons, 2008
•  China car sales top U.S. by Gilles Guillaume, Reuters, January 11, 2010
•  Mercedes-Benz says 2009 China sales up 77 percent, Reuters, January 11, 2010
•  Pierre Bordieux, Distinction: A Social Critique of the Judgment of Taste, London: Routledge, 1984
•  Pierre Xiao Lu, Elite China, Luxury Consumer Behavior in China, Wiley and Sons, 2008
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