Bling’s no longer king in China
Chinese luxury used to be bold, brash and bling. But as the country’s wealthy matures and fragments, a new set of values have emerged – based on quality, experience and craft. Now brands are having to work harder and more creatively to surprise, involve and engage these new luxury connoisseurs, according to McKinsey, and has overtaken Japan to become the world’s second largest luxury market.
‘Generally, Western perceptions tend to be that Chinese people are still immature regarding luxury,’ says Jonathan Hasson, Co-Director of Luxury Concierge China. ‘They think of bling, excesses and brashness. But having been exposed to luxury for over a decade, Chinese tastes and needs have matured rapidly.’
Nick Marshall, a luxury consultant that specialises in emerging markets, agrees, and says how many people now embrace much deeper values. It’s not just about showing off wealth, but showing off good taste. ‘They’re looking to demonstrate outwardly that they also know what to do with their money, and show that they’re sophisticated and cultured.’
So how are they doing this? Some brands are creating physical ‘energy’ spaces, which function as a tangible place in which to bring their values, story, and history to life. Whisky brand, Johnnie Walker, for instance, has done this with its Johnnie Walker House in Shanghai. It acts as a place for consumers to learn about the provenance and processes behind the drink.
To add to the complexity of the market, there’s also a disparity between the tastes of the old wealth and the young, according to Marshall. ‘The existing, more mature luxury audience are becoming more sophisticated and discerning,’ says Marshall. ‘Whereas the new, younger audience in more cosmopolitan cities such as Shanghai and Beijing often have a greater international outlook.’
Then there’s the issue of location. People in first-tier cities, such as Shanghai and Beijing, have had access to luxury retail for several years, and have therefore developed their tastes. ‘This segment is much more sophisticated with their spend,’ says Nick Marshall, ‘They want craft, provenance and quality.’ Meanwhile, in the tier two and tier three cities, luxury is still relatively new. ‘They don’t ask the same questions,’ says Marshall. ‘They’re at the stage where they want a lot more bling.’