China has become the world's second largest consumer of luxury goods, surpassing,
in 2008, the US to become, along with Japan, the world's largest purchaser of luxury
items, with an annual growth in demand of 20%. Today's China has an estimated
18,000 billionaires, 440,000 multimillionaires, and a fast rising middle class of around 250
million who have high purchasing power and are eager to spend on luxury goods. These
wealthy Chinese spent $8 bn on luxury goods in 2007 (Morisset and Lee, 2008).
Chinese yuppies are driving the demand, buying everything from expensive watches
to imported cars. Enjoying the sudden economic freedom, the newly rich capitalists are
eager to demonstrate their social standing buying the obvious luxury must-haves:
traditional French labels and expensive watches. According to Time (2007), 22% of affluent consumers in China own a Rolex, 66% of affluent Chinese men have bought at least
one watch in the past six months, and have paid an average of $2,253 per watch. The
most owned luxury fashion brands in China are Lacoste, Valentino, Chanel, and Bally. The
top luxury beauty brands are Estée Lauder, Lancôme, and Guerlain. More than 50% of
the affluent Chinese consumers own either a Lancôme or an Estée Lauder product.
On average, affluent Chinese consumers spend up to $280 for a single skin-care
product. Skin care is almost three times as popular in China as makeup and accounts for 26%
to 35% of total cosmetic sales. |
