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Myths and Reality about Chinese Luxury Consumers

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China for many decades now has been the preferred destination for outsourcing manufacturing of many products by global companies. The low-cost of labor, and material gave them this preferred status. Though, China enjoyed this status, it is now feeling this branding to be a curse that has harmed its image everywhere.

Making the difference between what is true and what is not about China is critical to be successful in China

The low cost of labor and manufacturing of China was misinterpreted, as China is obsessed with everything CHEAP.

Here is a list of 5 Myths about Chinese Luxury Consumers:

  • Myth- Not Quality Conscious: China, a popular destination for low-cost of manufacturing, products has acquired the reputation, as a source of counterfeit products as well! An estimate by the UN revealed that of all the counterfeit products caught in the world, 70 % are manufactured in China. Such low quality and fake products from China have flooded the global markets, giving the world a negative impression about Chinese, as having little regard or respect for Quality.

Reality: Chinese are equally quality conscious and such news only makes them even warier of the fake products, low quality available in the domestic market. Also, the high luxury taxes in China force Chinese to shop abroad, giving them an assurance of quality and reasonable price.

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  • Myth- No individual Style: China still has a strong family system, with emphasis on the whole, and not individuals, unique in the western societies. Society determines, and dictates the individual behavior, and lifestyle.

Reality: With the advent of internet, and fast improvements in technology, this is changing. The youth of China are expressing their opinions, voices on many social platforms available. All this has resulted in growth of individual preferences, tastes, etc among Chinese, youth in general.

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  • Myth- Ill-informed about Luxury Products: As Luxury products entered the Chinese market only recently, the world started misinterpreting this in a negative way, that China does not have a market for luxury products.

Reality: In reality, Chinese are very obsessed about luxury products; they conduct in-depth research on every brand, and every product that is available for sale. They research for information online, offline. Finally, it depends to a large extent on the brands to offer education on brands to consumers for better market penetration.

Fashion brand China

  • Myths- Society dictates the brand choice: In China it is strongly believed that personal preferences and choices are believed to be determined by society, as there is a strong social hierarchy. People value and care for social status and go for brands that have a high price.

Reality: People make conscious choices based on many factors, not just determined by society, as against the belief they prefer high price, costly brands for social pride. A research by Management consulting firm McKinsey revealed that Chinese consumers prefer understated luxury items that are affordable.

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  •  Myth: Chinese are obsessed with foreign brands: It is a popular belief that Chinese prefer Western brands and products, as they trust their quality.

Reality: Chinese are slowly realizing that, domestic products also offer same quality and functionality. This is especially true with the rise of Chinese luxury brands

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Myth busting is happening!

These myths are slowly being busted, as more and more luxury brands are growing popular with a huge Chinese customer base. The success of luxury stores such as Hung Hunag’s Brand New China, Dong Liang Studio, etc reflects the changing attitudes of Chinese towards Luxury.

Once you are well aware of what is true about China you need to understand how to be seen by the Chinese consumers. Go and take a look here to have more insights

Further reading

One Comment to "Myths and Reality about Chinese Luxury Consumers"

  1. Reply
    DOLY
    December 19, 2014 at 3:09 pm

    As usually, Olivier gives us a remarkable analysis on myths and reality about Chinese luxury consumers. Naturally Chinese Luxury firms have to make more efforts in the quality of their luxury products, il will allow too increasing their sales abroad. This improvement does not date to recently. In 1987 I remember having visited an excellent factory of suits and blazers in Shenyang, with American quality controllers on site, their products where sold in that time in Washington DC and Fifth Ave in NYC. And in the following years French luxury firms were already producing in China to sell in France and Europe. Good luck to Chinese luxury firms!

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