It has been said that the future of luxury is China and that theory may prove to be true. Luxury is a perception and how China’s super rich are classified will set the standards. More luxury marketers are studying the lifestyles of China’s most wealthy.
So who has the most money to spend on luxury? It takes more than classifying who has money, it will be necessary to learn the cultural environment of how to engage China’s wealthy. Note there are 143,000 multimillionaires and 8,800 billionaires in Beijing. There are 116,000 multimillionaires and 7,000 billionaires in Shanghai.
How do the super rich in China live?
The value of their luxury lifestyles is a characteristic that reflects extreme wealth. Being upper class represents more than just being rich. And those who are upper class are distinguished by their assets. Beijing’s will often sport Cartier over Louis Vuitton because Cartier is the brand of choice for upper class revealed by the Hurun Report.
According to the Hurun Report, a wealthy Beijing resident for example would have to spend at least RMB 87 million on property, cars and other luxury goods to get into the report’s good books. In comparison 1 Chinese yuan (RMB) = 0.146 U.S. dollars.
In the U.S. among the wealthy you have classifications of old money and new money. Plus no matter how MUCH money those with new money have they will never be able to enter some areas enjoyed by old money. This is the main reason why cultural and class among U.S. wealthy is still an existing problem today.
My concern for China’s wealthy is that they may be building an upper class that is substance of only materials. If China’s wealthy consumers are selecting luxury brands to represent class and status this presents a danger to luxury brands. Knockoffs are attractive because the lack of education surrounding value and features, benefits etc. are not considered.
For luxury brands targeting China’s wealthy is still very smart. However, it will become vital to increase exposure for awareness focusing on education and value of luxury brands. Creating a real solution to make luxury brands sustainable and engaging to China’s super rich.