fashion, lifestyle, dating and humor for the average guy

The Chinese Vs. Japanese luxury market. One region, different desires.

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To the average American it may not seem like there is a vast difference between the desire and demand for luxury goods between Japanese and Chinese consumers.  The reality is that couldn’t be far farther from the truth.  Sure both countries border the same body of water and both are in Asia but other then that they are two very different markets.

In his article from Business Insider, Erwan Rambourg sums it up this way, the Japanese customer buys luxury goods to fit in, while the Chinese consumer purchases luxury items to stand out.

In his 2003 book, “Living It Up: America’s Love Affair with Luxury” (Simon & Schuster), James Twitchell made the case that the urge of fitting in is depressingly vulgar but essential. The message from many luxury brands is that products will enable consumers to ‘re-invent’ themselves and that they ‘deserve’ to reward themselves.

Two recurring questions I hear are: ‘How is Chinese luxury demand different to Japanese demand?’ and ‘As there is limited growth with the Japanese, what is the risk that growth moderates quickly now with the Chinese?’

First, China is the only male-driven luxury goods market. Japanese consumption in the space has been essentially female driven.

But beyond that, there are many more consumer profiles in China and many differences in culture, history and sociology which make me believe that growth can continue strongly with the Chinese for some time still.

I have a friend, Francis Belin, who runs Swarovski for Asia Pacific and used to run Jaeger-LeCoultre (a watch brand, part of the Richemont group) for Japan. His view is that Japanese people used to purchase luxury products to fit in whereas Chinese are buying the goods to stand out. There are actually similarities there: consumption serves a purpose of being perceived as part (or not part) of a group. In Japan, you became part of society; in China, you leave the have-nots and show face when buying luxury. As Tom Doctoroff puts it in “What Chinese Want: Culture, Communism and the Modern Chinese Consumer” (Palgrave Macmillan, 2012), individuals in China ‘stand out in order to fit in’, meaning individual expression usually does not imply a break from the norm but a slight step up without straying away too much from conformity. This also may explain why it is rare to come across extremely innovative brands of Chinese origin.

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