Chinese customers are having an increasing appetite for buying big-ticket items. Global brands are using this attitude to tap Chinas luxury market.
Luxury is a constantly evolving, and a subjective concept, a state of extreme comfort, or indulgence. Luxury brands stand for excellence, and are actually a social code, that motivates the consumers to pay a premium price. This makes the segment more interesting and explorable.
China is expected to become one of the worlds biggest luxury markets in the next 5 years. A 2008 survey states that, the country enjoys having 4, 60,000 HNI (High Net worth Individuals) households, holding an asset value of more than 7 million RMB. Analysts predict, that this would further grow to reach 7, 50, 000 households by the end of 2011. They further predict that the total assets of HNI in China would double from 12 trillion in 2008, to more than 23 trillion by the end of 2011. The country is expected to consume 29% of the global luxury items by 2015. A study by Merrill Lynch study states that by 2014, Chinese customers will account for almost one fourth of the global purchase of luxury products.
Comparatively, the total number of HNI in China is more than other countries such as France, and UK. The affluent population of China is mostly concentrated in the coastal areas of Guangdong, Shanghai, and Shandong. Currently, the trend is spreading in other areas such as Beijing as well, and from I tier to II and III tier cities as well.
Attributes of the HNI population in China: