According to a recent report on Chinese consumer behavior in the luxury sector, it is Glorious to be rich in the world's most dynamic economy.
The report, from Trendbuero Asia-Pacific and Chinese Interactive Media Group, publisher of iLOOK, the largest women's luxury lifestyle magazine in China, investigates the changing needs and upcoming desires of China's consumers and how luxury brands can position themselves for success in the new luxury market in China.
According to Morgan Stanley, China will be home to 100 million luxury goods consumers and will be the world's top consumer market for luxury goods by 2015. Transitioning from communism to capitalism, the consumer market in China is mainly shaped by three generations who possess contrary ideals with regard to money and what money symbolises.
The baby boomer generation in China, for instance, sees money and luxury as an expression of power and status.
Generation X - owning 80 per cent of China's private businesses - trusts in material security dedicate themselves to earning money.
The Chinese generation Y on the other hand, single children shaped by global ideas and consumerism, believes that consumption is an expression of self and not just a status symbol.
While current Chinese values are mainly based on security, harmony, control and formation, Generation Y - the trendsetters of today and those who will make up the next league of luxury buyers - are causing a value shift towards hedonism, experience and sensuality.
From this shift, four types of luxury consumers will emerge, differing in social background, luxury experience and income level.
The Nouveau Rich, currently making up the majority of China's luxury consumers, equate names brands with success.
The Understaters, coming from a more international background, focus on differentiating themselves with their spending habits while Connoisseurs appreciate "soft luxury" and spend money to enrich their lives.
Spirituals, a small but growing number of returning overseas Chinese, look for authenticity and spiritual experiences.In the luxury market of the future, where Chinese consumers are more sophisticated, the experience and authenticity of luxury products will be vital to their success.
The report advises that the marketing, packaging, and services related to luxury products need to be revamped with Chinese consumers in mind.
One example of smart market adaptation could be the re-opening of Gucci factories in Italy - a strategy based on Chinese luxury consumers' trust in the superior quality of Italian-made goods.
However, not all luxury goods must be made outside of China to be guarantee authenticity and quality.
A high-end signature stamp by Montblanc is an example of a luxury product with a Chinese background while possessing a famous western insignia, renowned for its sophisticated, high-quality writing instruments.
This hypothetical product, unlike the Italian-made Gucci products, draws authenticity from being handmade in China's oldest stamp factory.
Trendbuero's report on luxury concludes that international luxury brandsmust not underestimate the rising need of Chinese luxury consumers for authentic and sensual experiences.
Even rich Chinese feel the personal effects of high-speed urbanization, individualisation as well as superficiality.
Trendbuero is an internationally operating consulting agency for trend research and marketing with its head office in Hamburg and Beijing.
Since 1992 it has been helping companies analyse social and consumer trends with the aim of identifying new market chances at an early stage, keeping brands and products up to date and using trends as a profitable contributor to product development.
Trend learnings and insights serve as the basis for creative strategies and concepts that take account of consumers' changing circumstances, aspirations, needs and values.
