Editor’s note: this article was translated and edited from Ifeng.com, and looks at the increasingly prominent role that many of China’s newfound wealthy female consumers play in the world of luxury goods. The article dispels various assumptions about the shopping habits and preferences of wealthy female Chinese consumers, and argues that nowadays many are informed, have taste, and are more interested in the cultural and historical significance of luxury goods as opposed to the face value. 

In many famous upmarket shopping centers in Europe such as Paris’s Galeries Lafayette or Rome’s Via Condotti, it’s not difficult to spot Chinese consumers indulging in some luxury shopping. Given the economic development and the rise of wealth in China in recent times, the sight of Chinese consumers in such places around the world is now one many are familiar with. Although it has been reported that China’s economic growth fell to 7.7 percent in the first quarter of 2013, the economic reforms and opening up of China under Deng Xiaoping have had an undeniably huge impact on many Chinese, so much so that many are now able to afford such luxuries and goods from famous brands.

Hurun Report announced that China currently has over 1 million millionaires and over 63,000 “super rich” (those with assets of over 16 million USD). Global management consulting firm McKinsey & Company predicted that by 2015, 32 percent of all Chinese families will be able to afford trips abroad and the purchase of luxury goods during their holidays, while management consulting firm Bane & Company estimate that Chinese consumers currently account for 25 percent of the world’s luxury goods market.  

Currently, this pushing power is largely coming from female Chinese consumers, which is a shift from around ten years ago, when luxury goods where most often aimed at men who would buy gifts for government officials or colleagues. In 2012, investment bank CLSA reported that women accounted for 45 percent of China’s luxury goods consumers. Although this number is still below the world average, there is no denying that the female Chinese consumers are playing an increasingly important role in the global luxury goods market. 

Women gradually breaking the chains of a male-dominated society

Although women in China are still living in a traditionally male-dominated society, many are seeing greater economic and social independence. A recent rich list showed that 11 of the world’s 20 richest female entrepreneurs were Chinese. Furthermore, a report undertaken by international advertising company BBDO shows that the ratio of senior-level female workers who earned more than their partners had already reached 26 percent. The BBDO report emphasized the fact that the consumption of luxury goods is gradually becoming dominated by women in China, and that even middle-class women were often willing to spend up to a month’s salary on the purchase of luxury goods in one go.

Regarding the popularity of certain brands, perhaps it is no surprise that Chanel leads the way as the most popular luxury brand (according to investigations undertaken by Bane & Company and BBDO), especially considering that many modern, economically independent Chinese women are able to relate to Coco Chanel’s story of being incredibly ambitious and determined in overcoming various challenges in a male-dominated environment.

Aside from their increased economic independence, there has been another aspect related to the growing influence many Chinese women have on the luxury goods market—the traditional preference of having a boy over a girl in China has led to a gender imbalance of 116:100. The increasing scarcity of women in China has meant that the competition among men who are looking for partners is fiercer than ever, with many men ending up buying luxury goods as gifts for potential partners.   

It’s all about the brands

To get a feel for the spending habits of middle class Chinese women, BBDO undertook an investigation and found something they called the “2-level differentiation phenomenon”. The concept states that on the one hand, many women like to purchase goods at mid-range establishments such as Zara, H&M, and Uniqlo, while on the other hand they are also willing to purchase goods at more expensive high-end stores such as LV, Dior, Gucci, and Chanel. The investigation found that the most important aspect for many female Chinese consumers was the core value of the brand in question. This means in a competitive luxury goods environment, the concepts of getting value for money or simply “the best product there is” don’t really come into consideration, but it’s more the status and reputation of the brands that really matters. 

Many people assume that female Chinese consumers of luxury goods don’t really have any taste when it comes down to the buying high-end products, and are simply doing it to show off their wealth. However, for the new generation of wealthy Chinese, this isn’t necessarily the case. Due to the increased amounts of Chinese travelling abroad as well as the sheer ubiquity and extensiveness of the internet, many Chinese consumers are already well-seasoned and experienced in their knowledge of luxury goods. Auditing company KPMG recently conducted a study of China’s luxury market that showed that Chinese consumers were familiar with around 59 luxury brands on average (compared to 34 in 2006).    

Cultural significance as opposed to status symbol

As mentioned earlier, China’s female consumers often consider the social status of luxury brands when they are buying, and this factor reportedly accounts for 32% of the market share. Other major factors that consumers take into consideration are appreciation of the product’s appearance or craftsmanship and purchasing luxury goods as a way of treating themselves. The pattern of blindly purchasing luxury goods for materialistic needs is slowly disappearing, with many consumers now taking factors of spirituality, culture, art, and history into account when buying. In fact, according to a BBDO investigation regarding China’s wealthy class, 60% of women believed that they were familiar with the cultural and historical backgrounds of various luxury brands.  

In China, the connotations surrounding luxury brands are maturing into something more than just a product. Often, exhibitions of luxury goods are shown in public spaces or museums and are seen as a key part of many social and cultural events. Recent examples include the Chanel culture exhibition and the Cartier exhibition held in Beijing’s Forbidden City. One notable phenomenon has been the increased prominence of jewellery giant Tiffany. Their iconic use of diamond rings and sapphire blue boxes – undoubtedly passed down to Chinese consumers via the classic movie “Breakfast at Tiffany’s” – has proven to be a big hit.  

For many of China’s wealthy female consumers, the historical and cultural backgrounds of the brands are much more attractive than their logos or their prices. They also prefer to purchase goods from brands that have 100 years or more history, as they consider these brands to be mature and to have a wider experience when it comes to customer service. BBDO and KPMG found that due their rich heritages, luxury brands from France, Italy, and Britain are particularly appealing to Chinese consumers.

Thanks to the increase of wealthy Chinese coupled with the deepening knowledge of luxury brands that many young, savvy female consumers have these days, it can be said that China’s fashion-conscious women are set to have a huge effect on the future of the world’s luxury goods market.

Source: Ifeng
 

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Keywords: Chinese women Chinese consumers China’s female consumers