Singles' Day and Black Friday may be behind us, but this hasn't dulled the enthusiasm for shopping among Chinese buyers, particularly for luxury goods
Singles’ Day and Black Friday may be behind us, but this hasn’t dulled the enthusiasm for shopping among Chinese buyers, particularly for luxury goods.
Bain & Company recently released an industry research report on the global luxury market in 2017, estimating that the market scale would reach 1.2 trillion euros ($1.0 trillion) in 2017.
It also said that personal luxury goods sales will hit a record high, with Chinese buyers accounting for 32 percent of the global sales.
It has become something of a cliché that China is the world’s largest consumer of luxury goods. But an equally persistent and less impressive issue is that production of the luxury goods being purchased so eagerly by Chinese people is still dominated by Western developed countries.
Even though it is the world’s second-largest economy, China has few well-known luxury brands.
These goods are seen as a symbol of social status, and even though their main purpose is often just for showing off, a considerable number of people still want to own them.
If a product can gain a lofty market reputation and high consumer satisfaction, gradually and naturally, its brand value will start to form. With the brand’s status rising to a certain level, the product will eventually evolve into a luxury.
At that point, it is no longer priced according to convention, but based on demand and the level of similar products.
But it takes years of effort to build a brand, and the reputation that famous brands have is based partly on the length of time they have been around. Companies that aim to become well-known brands overnight are unlikely to succeed.
Products that can enter the luxury category only come from enterprises that are devoted to producing goods for a long time.
Why is it that China does not produce globally renowned luxury goods? The reason is actually simple: China has a broad lack of international brands with a high reputation, not just in the luxury segment. And without brand power, goods will not become prized and widely sought after.
So if China is to have its own luxury products, work will need to be done in brand cultivation and in making them famous all over the world. Once such a brand appears and market acceptance gets higher and broader, with proper quantity and quality control, China’s luxury brand wish will come true.
When that happens, the scenario of Chinese people rushing to buy luxury goods produced by foreign companies will be less common.
To shift from “Made in China” to “Brand in China” and make Chinese brands famous around the world should be an aim for Chinese enterprises. The amount of luxury brands China produces will, to a large extent, reflect China’s status in high-end manufacturing.
China should not only be a luxury consumer, but also a luxury supplier. Only in this way can its position as the world’s second-largest economy be convincing.
If China becomes the world’s largest economy and it is still just a consumer of luxury goods rather than a supplier, it will arouse scorn in other countries and lead to doubts about the foundations of our economic success.
With the increasing scale of the middle class in China, their ability to buy luxury goods will become more and more strong.
So if a considerable amount of the luxury goods they buy are made in China, it will strongly boost China’s economic growth.