The buying power of luxury goods by newly affluent consumers has increased in China in a spirally ascending manner. The annual report shows that consumption of China would surpass the US by the end of 2012. The released report has to concentrate on how they spend with buying power. Regarding consumption, the Chinese market growth doubled for the luxury brand manufacturers.
Many reporters predict that in ten years the luxury items consumption will rise uncontrollably without stop. According to the report new found economic growth and its society with purchasing power, would encourage them to make mistakes if they keep on indulging luxury goods that may not have the ‘class’ value as seen in the west. The high-end luxury goods consumers in China are around 45 years old.
Currently, 30 percent of the wealthy population live in first-tier cities, such as Beijing and Shanghai. In a short period, the urbanization has played a major role in the market of luxury goods even in second and third tier cities. In these areas, about seventy percent of consumers are willing to pay with brand awareness more and more like first tier cities of Beijing and Shanghai. So American luxury goods manufactures have to investment more on luxury infrastructure as they are in demand by second and third tier cities. At the moment, the Chinese government is more than willing to invite overseas luxury stores to open shops in the smaller cities, in order increase revenue. However, awareness about luxury and class is something that the Chinese consumer still doesn’t quite understand.
Via: People Daily