China’s growing segment of affluent consumers has long attracted luxury brands around the world. Gucci, LV, Zegna and many other big brands tapped into the Chinese market in the early 1990s, long before it started generating revenue1. And rightly so, as more than 300,000 Chinese now have a net worth of over $ 1 million. Mainland millionaires control some $ 530 billion in assets, and over 170 million Chinese can afford to buy high-end brands2. Indeed, it now seems clear that China’s luxury consumer goods market, which didn’t even exist just 20 years ago, is on track to dominate high-end retail.
But what about domestic luxury brands?
China has a long history of appreciating luxuries – such as tea, jade and silk – and given the impressive growth in domestic consumption of luxury goods, local brands should have plenty of opportunities to grow.
Despite Chinese consumers craving luxury brand analyst, very few local luxury brands have taken off. In fact, several analysts have observed that when it comes to luxury goods, Chinese consumers are more likely to buy products manufactured outside of China3.
Labbrand’s previous research confirmed that consumers’ esteem for luxury products is heavily influenced by the brand’s country of origin. Indeed, a “foreign / western” origin seems obvious for many categories of luxury products.
However, while it is true that in sectors such as high fashion clothing and accessories the best foreign brands dominate, in other sectors, and especially those that have deep roots in Chinese heritage and tradition, Chinese brands have a good chance of success. have the upper hand.
Indeed, in a recent survey by MasterCard, it was found that Chinese top spenders prefer Hong Kong’s Chow Tai Fook to domestic Cartier and Wu Liang Ye and Maotai over Spanish, Australian and German spirits4.
In fact, the same survey found that high-end Chinese consumers rank quality above other considerations with a remarkable 92.7% of respondents citing quality as their first criterion when buying luxury, well before brand recognition. , still obtaining a good 68.3%, or fashion design, with 58.5