BEIJING, April 29 -- Luxury goods, once the polar opposite of "necessity goods," are no longer so superior in quality, scarce in number and emblematic of the elite alone. Sales are booming worldwide, in particular in China.
A report by the World Luxury Assn early this year says that China has recently become the world's second largest market for luxury goods after Japan.
This does not mean, however, the purchasing power of most people in China is comparable to that of average Westerners.
Statistics by China Association of Branding Strategy show that during the first few years of this century, only 13.5 percent of China's population, that is 175.5 million people, can afford luxury products.
Meanwhile, however, a survey by www.searchina.net.cn in May 2005 on nearly 1,300 Netizens from Shanghai, Zhejiang Province and Jiangsu Province showed that 69 percent expressed willingness to buy luxury products with their own money.
While the average monthly income of those surveyed was 2,593 yuan (370 U.S. dollars), their average yearly expense on luxury products was as high as 22,063 yuan.
That figure could be even higher today as the luxury market has expanded rapidly.
Moreover, while in Western countries, luxury buyers are usually between the ages of 40 and 70, in China the major buyers or luxury brands are usually between 20 and 40, as Wang Depei said in a speech hosted by China Europe International Business School on April 18.
Wang is vice chairman of the China Economic System Reform Research Assn.
Unlike most Westerners who buy luxury products to enjoy the special culture of the products, many Chinese people buy them merely to show off their wealth.
For instance, says Wang, many Chinese shoppers in Europe prefer bags from Louis Vuitton to any other brands, despite the fact other luxury brands -say, Bottega Veneta, a famous Italian brand - are positioned higher and considered by many to be of higher quality than LV.
In their view, what matters is not whether LV is the top luxury brand in the world, but whether LV is famous among Chinese consumers. Their vanity is satisfied as long as others recognize their luxury product and admire them.
This is the typical psychology of many Chinese consumers of luxury goods.
While this showing off no doubt contributes to the vulgarization of many luxury products, the businesses that own those brands are more to blame.
The old family-owned luxury businesses that were dedicated to integrity and quality are gone. This is documented by Dana Thomas, a journalist who has covered fashion for many famous American newspapers and written the book "Deluxe: How Luxury Lost Its Luster."
Instead, the industry is run by large-scale global corporations focused on growth, visibility, brand-awareness, advertising and above all, profits.
That so many luxury brands are expanding their businesses so quickly the world over is the best evidence. As a result, their fame for high quality is deteriorating into fame for lots of products that cost a lot.
If this trend is irreversible, there is at least one thing these businesses can do to improve the situation.
"Luxury products should be made to serve the purpose of environment protection," Wang emphasized. They should be durable so they can last for years, or even be handed down from one generation to another.
As to the conspicuous consumption, Wang says it's natural at a time when an increasing number of ordinary Chinese find themselves with larger disposable income than ever before.
(Source: Shanghai Daily)
