Understanding the Chinese luxury market: Three competing notions of self-worth
Although Chinese consumers are becoming more independent and individualistic, they continue to pay attention to traditional social hierarchies – which means that brands need to help people balance these competing modes of thinking.
That was the main message from Rhiannon Price, head of qualitative at Northstar Research Partners, as she addressed an audience at a 'Perspectives on China' event hosted by Northstar Research Partners, a market research firm, and the London School of Economics.
Attitudes are moving to gaining and displaying status through who they are rather than what they own and "consumers aren't as willing to play the game anymore," said Price.
The changing marketplace
According to Price, the luxury market continues to grow, but this growth has slowed over the past year or so, for four main reasons:
- People are finding new ways to display their status as luxury products become ubiquitous
- Extravagant and ostentatious behaviour has become distasteful to many, an emerging and widely-used Chinese term 'tuhao' – meaning 'crass rich'
- More generally, China's economic growth is slowing, with people becoming more cautious in their spending habits
- The Chinese government is cracking down on corruption, including gift-giving among government officials – which usually consists of luxury products.