Top 7 Reasons Why Chinese Buy Luxury Goods

Why Chinese Buy Luxury Goods? People from different cultures and societies are conditioned to shop in a certain way. This way of life becomes part of their lifestyle, and to them, that is the only way to live.

Today, we look at individuals who choose to live life luxuriously – the Chinese. There may be several negative things said about them, but the truth is that the Chinese live quite luxuriously. Which begs the question, why do the Chinese buy a lot of luxury goods, and more importantly, what’s the root of the general luxurious shopping behavior of the Chinese people?

In this article, we’ll share insights into Chinese shopping behavior, and most importantly, the reason why the Chinese buy more luxury goods.

Understanding Chinese luxury shopping behavior

Before we delve into the details of the Chinese luxury shopping behavior, let’s first look at the basics. Specifically, what luxury good/ luxury shopping is.

Luxury is a term derived from ‘luxuria,’ which is Latin for the ‘extras of life.’ It is a concept that refers to having expensive and exclusive goods. Luxurious goods, in this case, refer to the goods that often carry a high/ premium brand perceived quality. Such goods are characterized by high prices, aesthetic designs, superb quality, the best reputation, a sense of heritage, desirability, personality, and exclusivity. Luxury goods are the objects or goods that give individuals a positional status in society.

But before we look at the Chinese Luxury goods shopping behavior, it’s important to note that the luxury fashion industry has its roots in France. This luxury fashion industry began in Pairs upon the arrival of Charles Frederick Worth and his invention of haute couture. The subsequent success of haute couture came from his decision to target the upper-class citizens and the aristocrats. It also gave rise to several other luxury brands that have taken over the luxury markets today, for example, Louis Vuitton.

The luxury goods market has since grown, and today, China is one of the biggest consumers of luxury goods. According to studies, the expansion and competitiveness of the luxury goods companies, the market has grown globally. China takes one of the biggest stakes in the market, with Chinese consumers said to afford luxury goods noted to have hit a record 1.3billion in 2012. Of course, the numbers are significantly higher in 2020, which is why we sought to understand the behaviors around luxury goods consumption in China.

Chinese luxury shopping behavior

The primary reason for the rise in the consumption of luxury goods in China is that these goods have been used as a means through which the Chinese cope with and handle challenges around purchasing power and cultural differences across China.

Most of them perceive and aggressively pursue their values in association with luxury goods. These goods are the social tools that they use as social identification reinforcements. Therefore, it would be safe to say that the luxury goods are used as social goods for the increasing distance between social groups while also making it easy/ possible for peers in similar social status to identify each other. Looking at consumer behavior, it’s quite notable that luxury fashion brands in China are more common with middle-class citizens.

With these factors in mind, and the fact that China is the world’s fastest-growing economy and also a country with a massive population, the massive growth spurt of the luxury goods markets in China makes more sense. The middle class is the biggest driver of this market, and increasing purchasing power, as well as the need to keep up with trends for high-quality, top brand goods, makes China the biggest market for luxury goods.

But peer pressure and the need to keep are the only drivers of this market and the subsequently high demand for luxury goods; lack of knowledge among the middle-class consumers is a contributing factor, especially because these individuals only end up buying the luxury goods following the recommendations of the fashion industry experts.

Then there is the fact that the luxury goods are largely regarded as fetishes’ from ‘abroad’ and people end up buying these goods just to show off. With people pre-judging each other based on their appearances and how the others look at first glance, there is no denying that this market will only thrive. Most of the Chinese people see the purchase of luxury goods as good fortune and an apparatus to strengthen their positional value for luxury, rather than their personal hedonism.

Why do the Chinese buy luxury goods?

Now that we’ve made sense of the Chinese luxury goods shopping/ consumer behavior let’s breakdown the reasons why the Chinese buy a lot of luxury goods compared to the rest of the world.

1.Status Symbols

The primary reason why China is the biggest consumer of luxury goods has to do with class-ism.

While this may sound like something that should be dead in this day and age, the truth is that the Chinese culture is still very much reliant on social classes.

In China, how you are treated depends on the car you drive, the handbags you carry, the schools your kids go to, where you live, the size of the house you live in, your wages, etc. Who your parents are and what they do matter, as does the location on your residency card.

Generally, Beijing and Shangai are more desirable places for people to live, and people from other places may not interact with people from such well-to-do places.

In this regard, marrying is also a class matter, and for you to get married, you must have a car, a large house, and significant savings.

 

2.Affirmation of social statuses/ success

 Most of the luxury shoppers in China are the new generation of the Chinese population.

They are significantly younger than the West and the rest of the world, and they buy luxe as an affirmation of their success and social status.

It is better known as the Face ‘Mianzi’ in Chinese, and these kids are literally willing to spend more than they need in a month to spend on that new Louis Vuitton bag rather than being different.

3.Family size – they can afford them.

Besides having to be rich/ wealthy to marry from a wealthy family, the other reason for the growth of the luxury goods market has to do with the fact that wealth is pretty much contained within small family units.

And also, there is a lot of new wealth across China, something that’s also attributed to the small family units.

If, for example, you have a family with 4 wealthy grandparents, 2 wealthy parents, and just one child, it would make sense that most of that money is spent on life’s biggest and best luxuries.

In other words, these people buy luxury goods because they can afford them.

 

4.Signs of Recovery/ National Success

Over the years, the Chinese have undergone several phases of decline as well as domination, specifically by the West, along with other big cultural revolutions.

 So, by being a second world power, China is showing the rest of the world that it has recovered.

On a national level, buying luxury goods symbolizes their success.

 

5.They desire luxury

While buying the best of luxury products is linked to belonging to a particular class, specifically the elite, the Chinese are increasingly consuming luxury goods just because they desire these goods.

For the new generations, individualism is the trendy thing as emulated from the West, and Millennials plus Gen X are purchasing luxury goods for immediate gratification and as an expression of their personalities.

6.Collectivism

The Western Societies are ruled by individualism with emphasis on distinctiveness; but the Chinese live by collectivism, which means that it’s becoming a societal norm for the individuals who respect the social norms to join in on trends while aspiring for conformity and being assimilated into the cohesive and strong social groups.

Therefore, buying luxury goods has become a societal symbol/ badge of success. This, however, is limited to the older generations.

 

7.Shopping while traveling is cheaper

Finally, it’s cheaper for them to buy the luxury brands when traveling, and this saves them import taxes.

 

Conclusion

Social symbols, prestige, a sense of belonging, and an outward show of wealth.

These are just some of the main reasons why the Chinese are taking over the luxury goods market.

 And with an increase in purchase channels, luxury goods purchase by the Chinese will only continue to thrive.

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