Why Many Chinese People Buy Luxuries
Even though luxury goods market in China consists of various luxurious products that found globally, research studies reveal that the country has the largest number of luxurious goods clients (Yeoman, 2011). Chinese luxury purchases annually have been estimated at $ 8.6 billion according to Yeoman and it accounts for more than 27 percent of the global total consumption.
Statistics also indicate that the purchasing power of luxurious products amongst the Chinese population has been increasing tremendously. Chinese girls are known to purchase a wide range of designer bags including leading luxurious brands such as Gucci, Louise Vuitton, Hermes, Tiffany and Dior. Chinese boys conversely are seen driving expensive car models including Audi, Benz, BMW, Land Rover and Lexus.
Chinese clients are however known as the most reliable consumers of luxurious and statistics indicate that first and third world countries are often the suppliers of luxurious products purchased by Chinese clients (James, 2012).
Why Chinese People Buy Luxuries
There is no doubt that luxury consumer market came to exist just a few years ago but Chinese clients are known to dominate the largest market share, a fact that is also increasing by the day. Studies also reveal an interesting scenario in relevance to product consumption amongst Chinese clients. This has also been proven quite incomparable to any other luxury group consumers including the US (James, 2012).
Even though there are perceptions that triggered different arguments in relation to Chinese purchasing pattern of luxury products, it is obvious that there are a number of crucial factors that play a crucial role in contributing to the pattern amongst the group of consumers (Yeoman, 2011). Vanity is one of the factors contributing to the high number of Chinese purchasing luxury goods.
While studies reveal that many wealthy individuals especially amongst American populace love to maintain their status quo in an unnoticeable way, Chinese people purchase expensive products including clothes, cars, handbags and shoes to reveal their status quo (Giroir, 2011).
Even though Chinese people may not necessarily be wealthy as they portray, they often work hard to purchase quality and designer brands to convince colleagues at school and at work that they are wealthy. Their living and working environments where their colleagues drive expensive cars and wear expensive clothing influences their desire to like the same and influence them.
Studies also reveal that the recognition amongst the Chinese people is highly attached to the product brand that one is a position of purchasing. While it may not be obvious that some individuals in the populace may not need designer and luxury products, the need to satisfy a person’s vanity and jealousy often makes the person to purchase the products (Giroir, 2011).
Additionally, the need to purchase high quality products is a factor that contributes a great deal to the increasing trend of luxury product purchases amongst the Chinese. According to Yeoman and McMahon-Beattie (2011), a significant number of the same individuals across all generations and social status report that own one luxury product compared to low quality and cheap products.
From the above trend, it is clear that many people are driven by quality and not lower cost. It is also clear that quality products are relatively expensive because they are made of rare and precious metal. According to Carcano et al (2011), companies that specialize in luxury products production are concerned on how to promote exquisite workmanship to attract a continuous stream of clients to make huge sales.
This also indicates that many Chinese consumers are attracted to expensive luxury dealers because they are more concerned on quality as well as service intended to maintain reliable steam of clients. High living standards and high economic standards have also led to a growing trend of luxurious products purchases amongst Chinese clients.
According to Jos (2003), development and growth of Chinese economy has been growing rapidly. It has also been enhanced economic status of the many individuals who have also continued to earn a lot of money. A research study that was carried out in 2009 by China Merchants Bank and Consultancy Bain & Company indicated that more than 320,000 wealthy Chinese controlled an average of 10million Yuan, and it represents a collective wealth average of 8.8 trillion Yuan, an equivalent of 29 percent of Chinese national GDP, that is also estimated at 30 trillion Yuan ( Giroir, 2011).
The amount additionally portrays a fact that many Chinese people have the capacity to purchase a wide range of luxurious products, a reflection of their social class and status. According to Yann (2011), luxurious products are purchased to express purchaser’s prestige as opposed to their functionality. This reveals the fact that many wealthy people can purchase expensive clothing, watches, cars and shoes just to prove their social standing in the society.
Yann also explains further that personal tastes and preferences change as living standards of individuals improve gradually. With enhanced decorations reflecting on preferences for attractive products among high social status, wealthy people amongst the Chinese prefer high costs to obtain attractive and luxuries products in the market.
Additionally, social obligations are closely related to the increasing trend of Chinese populace purchasing luxury products. According to Degen (2009), giving gifts is quite common in china where members of the society are expected to reciprocate giving to enhance strong group ties.
Even though individuals are not often restricted to the type of gifts they offer to their colleagues, friends or peers, luxury goods are seen as a means of esteem communication towards the recipient and in the end, it enhances the state of honor on the giver. This also explains the why Chinese clients may purchase luxurious products for their clients and peers to achieve recognition and honor (Jos, 2003).
Despite various perceptions that have been put across explaining the growing trend of purchase of luxurious products amongst Chinese clients, it is clear that there are factors culminating from environmental, cultural and individual influences that play a crucial role in triggering the trend. Vanity however is a major factor contributing to the trend in which, many people purchase luxurious products despite high costs as opposed to cheap low quality products.
High economic standing and living standards also influence decisions of Chinese clients to purchase luxurious products to reflect their classes and social statuses. Social orientation is additionally imperative as it has contributed to the growing trend witnessed amongst Chinese clients to purchase the products as a reflection of their esteem while gaining honor in gift giving.
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Carcano, L. et al (2011). Why Luxury Firms are Often Family Firms? Family Identity, Symbolic Capital and Value Creation in Luxury-Related Industries, Universia Business Review, (32): 40-52.
Degen, R. (2009). Opportunity for Luxury Brands in China, IUP Journal of Brand Management, 6(3/4): 75-85.
Giroir, G. (2011). Hyper-Rich and Hyper-Luxury in China: The Case of the Most Expensive Gates Communities. China-USA Business Review, 10(6): 454-466.
James, T. (2012). Living it Up: Our Love Affair with Luxury, New York: Colombia University Press.
Jos, G. (2003). Shanghai in Transition: Changing Perspectives and Social Contours of a Chinese Metropolis, London: Routledge Curzon.
Yann, T. (2010). Personal Aspirations and the Consumption of Luxury Goods, International Journal of Market Research, 52(5): 653-671.
Yeoman & McMahon-Beattie (2011). The Changing Behaviors of Luxury Consumption. Journal of Revenue & Pricing Management, 10(1): 47-50.