We have previously discussed the importance of avoiding typecasting when launching campaigns in Saudi Arabia, but now we are turning our focus to another “emerging” (or should we say “re-emerging”?) consumer market – China. Recent reports suggest that the world’s most populous country is now the world’s largest luxury market, having leapfrogged the U.S. to account for 27 per cent of global spending on high-end products and services.
The two main segments driving this consumer boom can be divided into the aspirational, urban-based middle class, and a more traditional, established class that could be termed the “new nobility”. We are going to focus on this second group. Who makes up China’s “new nobility”? What are they like? What makes them tick? And what makes them different?
Traditionally members of the business and industrial elite, the “new nobility” represents ultra-high-net-worth individuals descended from the “founding fathers” of Communist China. They are therefore typically more accustomed to wealth and status than their nouveau-riche counterparts, and could be said to be concerned with conventional Chinese values and codes. One would therefore expect members of this elite to be more discreet and less ostentatious than other luxury consumers across the country. Basically, you won’t catch them putting Coca Cola in their Château Lafite…
Part of this is emphasis on discretion is to some extent politically motivated. China’s ruling classes have historically been accused of corruption, with high-end officials living the high life while much of the country remains poverty-stricken. But in an age of increasing media scrutiny and transparency, the most far-reaching anti-corruption campaign of recent times is under way. The inevitable consequence of this is that garish, excessive flaunting of wealth among this “new nobility” is neither fashionable nor advisable, “conspicuously embracing a more conspicuous lifestyle” as this blog puts it.
Another important feature is that there is an ever greater focus on “buying local”. While Western luxury brands are undoubtedly extremely popular in China as Eurozone gloom persists, the “new nobility” are more intent on supporting home-grown talent. The recent appearance of China’s elegant, understated first lady, Peng Liyuan, wearing an outfit by local designer Exception, and the subsequent press coverage, was a case in point.
Finally, another salient characteristic of this elite demographic is an increasing focus on brand loyalty. Evidence suggests that these luxury consumers, with their appreciation of heritage, durability and tastefulness, are more concerned with service and quality rather than with status. The use of good materials and subtle craftsmanship register higher in their priorities than other high-end shoppers and service users in the region.
Understanding the make-up of China’s vast population of big spenders is a complex task, and one that is open to inaccurate profiling and prejudice. One thing that is for sure is that a “one-size-fits-all” approach to the market is not satisfactory.Read More