Chinese luxury love: The big bling-bling is not over yet

In economically lean times, buzzwords of abundance are not popular: glamour, lifestyle, hedonism – these seem to be terms from the recent, but already historicized past. The luxury industry and high consumption have always been an expression, motor and distinguishing feature of affluent societies. This also applies to Chinese society and its upward and status-oriented middle class. The paradox between collective conformity and individual excellence is symbolically resolved through the ostentatious display of one’s own status.

Western brands are trend-setting for Chinese consumers and a benchmark for materially motivated connoisseurs. Luxury goods act as a codification of individual success. It is no coincidence that the leading French luxury holding company LVMH, which is also one of the most valuable companies in Europe, is omnipresent in Asia. A McKinsey study predicts that by 2025, around 40 percent of the luxury industry’s sales growth will come from China.

Tough competition in the megacities

The European luxury goods industry, which also includes German car manufacturers, sees Xi Jinping’s empire as by far the largest and most profitable market. A recent Bain study expects that the Chinese domestic market alone will account for 20 percent of global business in the luxury goods segment. Due to the latest political and pandemic developments, a process of hesitant rethinking is beginning in Europe, but for the growth and export-oriented European economy, the Asian region, and with it China in the first place, is difficult to replace.

Especially since two new large and affluent consumer groups were identified there. The association of the Italian luxury goods industry, Altagamma, names them “young urban Chinese” and “female Chinese leaders”. What both groups have in common is their need for demarcation and distinction. Because nowhere is the competition for income, status and social recognition tougher than in the Chinese megacities. In China, ostentatious symbols of success fulfill a clear function of distinction.

Western brands with their universally applicable ciphers still offer the greatest global appeal – and thus the greatest potential for distinction. The same luxury labels that can also be found in the department stores of London, New York and Paris dominate in the shopping malls of Beijing, Shanghai, Nanjing and Hangzhou. “When it comes to luxury, most Chinese think of Italian and French fashion and lifestyle brands first and foremost,” says Huo Yuan of Shanghai’s Tongji University.

If you want to display your own prosperity as unmistakably as possible, you don’t need any discreet forms of expression or ones that require explanation. Succinct logos visible from afar and striking colors dominate, the urge for opulence is unmistakable, understatement plays no role. The need to demonstrate one’s standard of living to others and to continuously improve it is particularly pronounced in status-obsessed China.