Ditton Wine Traders’ fine wine blog

Now the world’s second largest luxury market, China’s super-rich bought a quarter of the world’s luxury goods and according to the World Luxury Association, affluent Chinese lavished US$ 8.6 billion on luxury goods last year. Despite the recent economic downturn, luxury brand owners continue to expand their presence in this market.

Luxury culture, throughout Chinese history, has been much appreciated by those in higher standings, but did not involve  conspicuous consumption. With Chinese history being so rooted in and influenced by Confucianism, the recent rise of state capitalism has given way to confusing and contradicting values. Confucianism promotes frugality, respect, and family, among many other attributes. The Chinese have grown up with these values, though each generation has become more open minded and used to the Western style of luxury and consumption, especially with the continually increasing number becoming wealthy.

Pierre Xiao Lu’s Elite China is a handbook for fashion and luxury brands to better understand the China luxury market and the Chinese consumers and provides a deep and detailed analysis from the historical, cultural, social, economical, marketing and consumer behavioral points of view. Here’s an interesting recap of it’s different psychographic consumer segmentations by luxury China marketer Daniel Kong:

1. Luxury Follower: This consumer-type follows trends that are dictated by the media, and are hence are the least individualist. This may mean that their understanding of what they buy may seem less thorough in their internal assessment of the product during all stages of the consumer decision-making process. Furthermore, their collectivism may mean that they will be more willing to embrace products which display their affiliation to wealth, status etc. Given the saturated nature of advertisement and fashion media in the modern digital age, there is an impulsive, almost frenetic nature in which the consumer purchases goods. Their purchases may also tend more towards “trendier” products rather than classics that may span beyond a season collection.

2. Luxury Lovers: This segment revels in the aspirational qualities of the luxury product, understanding the brand and design story of their favourite fashion houses. According to Lu’s book, Luxury Lovers are a heterogenous group of people. Unlike the Followers, they are more interspersed between the individualist/collectivist spectrum. This would make sense given that though they are able to navigate more independently between the different brand stories, they are still saturated by these different forms of media. Since they are enthusiastic to engage with the brand, I’m speculating that Lovers may make very good brand evangelists.

3. Luxury Intellectuals: This third group of consumers do not dictate their purchases by trends. Rather, their choices are more subdue, classical and low-key. What is perhaps most striking about this group is that its tendencies seem paradoxical to the values of modern Chinese consumers. Since they are least likely to follow trends, Intellectuals can be seen as decidedly individualist, a term opposed to traditional Chinese values of family, friends etc. However, the discretion in which this group buys its products aligns itself with the idea of frugality found in Confucianism. 

4. Luxury Laggards: This last and final segment of consumers presented by Lu is personally the hardest to understand. As they are usually the last to adopt innovations seen by the right segment in Schutte’s study, one can deduce that they are less involved in actively understanding each brand. Therefore, they may make less conscious decisions leading them to, as Lu states, be more impulsive shoppers.