Luxury marketing in China's lower tier: Insights from Volkswagen and Tiffany

Tessa Thorniley

The rise of China has had a huge impact on the luxury goods industry; the country is second only to Japan in terms of expenditure on high-end items. But at a time when China's economic expansion is slowing, and brands are seeking new markets in lower-tier cities, how is Chinese luxury marketing changing?

At the Market to Watch: Building Brands Beyond Tier One in China conference in Shanghai, several luxury brands came together to reveal which strategies were working in the current climate, and what luxury consumers in lower tier cities are looking for.

Volkswagen Phaeton: a lower-tier success story

Although China's economic outlook is more uncertain than it has been for several years, there is still a healthy appetite for luxury goods. Paul Hu, Managing Director of the Volkswagen brand at Volkswagen Group Import China, described the rising purchasing power in lower tier cities as possibly the "biggest shift in marketing in China since the opening of the country in the 1970s".