Spending On Everything From Luxury Cars To Private Jets Shows Ultrarich Chinese Are Unleashing Their Inner Conspicuous Consumer
An interesting blog post today at the Wall Street Journal, where Robert Frank points out that the global economic downturn has turned a new spotlight onto a once-unlikely savior — the Chinese [ultrarich] consumer. While this group is exclusive to say the least, particularly in terms of the miniscule percentage of the Chinese population that can live up to this title, the staggering dropoff of the once mighty American, Japanese and even Russian luxury showoff has pushed the Chinese super-spender into the leading role.
Though Frank’s potential nicknames for this ultrarich group of big spenders — “Deng Xiaoblings,” for one — are a humorous take on the subject, the repercussions of an Eastward shift of conspicuous consumption and luxury shopping sprees could mean a great deal for established western luxury brands. Just as the increased buying power — and desire for diversification — seen among Chinese buyers of everything from gold to real estate to luxury cars to Chinese antiquities and contemporary arts has affected those markets and caused everyone from Bugatti to Sotheby’s to focus far more strongly on the China market than ever before, this China-bound luxury shift could very well change the nature and corporate strategies of the global luxury industry.
Purveyors of posh have a new mandate: Go East!
An updated forecast from Bain & Co. out this morning shows a stronger-than-expected rise in luxury sales for Asia–especially China. It said it expects luxury-goods sales in mainland China to jump 12% this year.
Meanwhile, the U.S. luxury business continues its downward slide. Bain said it expects U.S. sales of high-end clothing, accessories, tableware, cosmetics and jewelry will drop 16% this year. Sales in Japan are expected to fall 10%. Europe is expected to post an 8% decline.
The question is whether this is a temporary or more lasting phenomenon.
[T]he Chinese are discovering their inner conspicuous consumer. Sales of everything from private jets to watches and jade-inlaid Ferraris are soaring.
If the growth continues, we will need a new name for this new breed of Chinese spender, akin to the Blingsheviks of Russia.