Chinese luxury shopping behaviour

This issue contributes to Chinese luxury shopping behaviour regarded to the basic aspects of luxury industry. This work offers further information about the history of fashion and luxury goods market in different part of the continent focusing more on Chinese market. We can get closer to this field of social aspect highlighting Chinese middle class luxury shopping behaviour and gain more information from the field of luxuries.

Luxury goods and luxury market

The term luxury comes from the Latin ´luxuria´, which means the ´extras of life´.^[1] The concept of luxury goods refers to have expensive, exclusive goods. Those goods often enjoy high brand perceived quality, and are characterised by high price, superb quality, aesthetic design, heritage, reputation, exclusivity, desirability, personality. Luxuries are objects that provide positional status in society.

History of fashion and luxury goods industry in the West

The modern luxury fashion industry originated in France when Charles Frederick Worth arrived in Paris and invented haute couture. The emerging clothing identity was pivotal for the development of luxury goods in the 19c.The success of an haute couture house depended on the talent of a designer who owned the house and who produced made-to-order clothes for aristocracy and upper class. The social groups wanted to reflect wealth and social status. In the 19th century the industrialization of Europe gave rise to luxury brands, many of which are still existing today, such as Louis Vuitton (1854).^[2] From the late 1960s, Italian and American luxury fashion companies entered in the market providing ready-to-wear clothes instead of traditional made-to-order ones which replaced in many ways the function of haute couture houses. Nowadays the purchase and the use of luxury goods has a big role to exhibit personal and social identity through independent style rather than single brands. Consumers are more au demanding, heterogeneous and sophisticated. On global scale, they increase choices in luxury products, shopping channels, and price levels.

The luxury goods industry

Luxury goods companies are trying to improve their competitiveness with expanding their market geographically. They are oriented towards markets such as China, which currently is the biggest market for luxury and prestige brands from the Western industries. The number of Chinese consumers who can afford luxury goods is about 1.3billion (2012).^[3] Chinese consumers are increasingly brand aware, and they intend to invest in luxury fashion brands.

China and luxury goods consumption

Luxury goods companies have to cope with the challenge of cultural and purchasing power differences in China. According to Wong and Ahuvia: ´´The Western rationality inherent in most consumer theories needs to be reinterpreted through the eyes of Eastern reality" (Wong & Ahuvia, 1998, p. 436).^[4] China is culturally a collectivist country, and identities are often described as Confucian collectivism which emphases the social relationship and group welfare over individual needs. Chinese consumers are concerned with positional value consumption in their luxury fashion brand purchasing behaviour. They perceive and pursue comprehensive values associated with luxury fashion brands. Chinese consumers put more emphasis on social value brands compared with other countries. They often use material possessions and brand names to reinforce their social identity. Luxury goods are their social tools to increase distance from other social groups and to identify with peers of same social status. However personal cultural orientations can be influenced by age, social class, education and travel.^[5] Western luxury goods companies, when entering China, should also take into consideration the Chinese multidimensional cultural orientation (heterogeneity of Chinese consumers). When cultural meanings of a luxury brand are consistent with one's cultural orientation, the consumer is more likely to form positive beliefs about and attitude towards purchasing the specific brand resulting in higher purchases. Chinese consumers are the most influenced by word-of mouth strategy when buying new goods. According to some research, collectivist consumers are likely to pay more attention to interpersonal effects of purchasing goods whereas individualist are more likely to consider the personal dimension of purchasing luxury goods, and whereas collectivist consumers tend to comply with social pressure, individualist consumers are less affected by the influence of reference groups.^[6]

Chinese luxury fashion brand consumer behavior (middle classes)

With a fast growing economy and a massive population, China managed to become the most attractive markets for luxury brands in the world. The growing middle-class group in China is a main engine for luxury businesses. Increased buying power and following the trend of shopping in high quality and branding goods make these people willing to purchase mid to high end luxury products .^[7] Due to the lack of knowledge Middle-class consumers in China buy luxury products under the recommendations of experts in the fashion industry. For Chinese people luxuries are still very much a ´fetish´ from ´abroad´. Many people buy luxuries in order to show off, and people consider each other very much on the appearance and just by the first glance .^[8] Chinese people seem to purchase luxury goods to good fortune, and apparat to stren the positional value of luxury rather than personal hedonism.

Chinese middle-class consumers perceive luxury brands as highly valuable possessions, and they primarily use them as a tool to meet the social expectations of important reference groups .^[9] The best-known luxury brands are no good options for consumers who want to express their own uniqueness, probably due to the popularity of the brands. Chinese middle-class consumers are not perceived as extravagant shoppers but they prefer to buy products that will provide them with a social status. This trend also explains why Chinese consumers constitute a fast-growing market for luxury products at the same time that they save a much higher percentage of their incomes than their counterparts in other countries. Due to their culture Value Consciousness and Susceptibility to Normative influence played a crucial role luxury brands and Chinese Middle-class consumers. Those to elements helped Companies to communicate with target consumers and build marketing strategies to position a luxury brand in China. For example, a common positioning strategy used by established luxury brands in China is to place an emphasis on superior product.^[10] Due to the lack of knowledge of Chinese consumers this strategy may have worked successfully but companies are trying to focus on the ways in which the brands can help consumers accomplish their social goals. Luxury brands in China need to highlight the social meanings of their products and clearly communicate how their products can benefit consumers in important social situations and connect them with desirable social groups.

The most famous luxury brand categories according to Chinese consumers

China is set to become the second biggest consumer of luxury goods by 2015.^[11] Hatssmon Y. & Dixit V. (2009), Understanding China's wealthy, McKinsey Q (4):32–3.eavily influenced by fashion advertising and magazines for over two decades, wealthy Chinese consumers are no longer naïve admirers of just any big logos. They have developed their favourite luxury retailers. The top luxury brands favoured by Chinese consumers:

Fashion

1. Dolce & Gabbana: For Italian, everything Chinese is exotic, and vice versa. The brand is especially popular among Chinese young adults for its brave and cas-cool style.
2. Louis Vuitton: Vuitton is probably the most recognized luxury brand in China. Not as popular among the fun-loving younger set, Vuitton is beloved by the more mature generation, who admire its royal background, quality and the trademark design.
3. Gucci: Gucci has 16 stores in China, recorded sales growth of more than 65% last year.

Car

1. Audi
2. BMW
3. Lexus
4. Rolls-Royce Phantom

Beauty

1. Lancome
2. Dior

Jewelry

1. Cartier (jeweler)
2. Swarovski

Watches

1. Omega
2. Rolex
3. Longines

Pen: Montblanc (company)

Yacht: Ferretti

References