Lately, instead of China’s wealthy, the middle class has been fueling sales at Louis Vuitton.
Twenty-six-year-old Cherry, a secretary at a financial services firm in Shanghai, told me she scrimped and saved from her $800 a month salary to buy a $1,000 Louis Vuitton bag because she loves “the feeling” of carrying it when out with friends.
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Well, this also happened in the early days of the Japanese case, so I don't know what's making them worry. It's not really surprising. In one of the books I've read, they have featured Asian countries' luxe evolution and it has five stages.
1) Subjugation (desire, dream)
2) Start of money (economic growth)
3) Show-off (the need to announce the money)
4) Fit-in (large "middle class" customer base)
5) Way of life (used to quality items, no turning back)
Japan is in the 4th and 5th stage, while China is seen to be on the 1st to the 3rd stage, India on the 1st to 2nd, Taiwan and Korea on the 3rd to 4th, and HK and Singapore from 3rd to 5th.
But then again, compared to the Japanese case, the middle class of China is larger in number than Japan's; thus the worry with the ubiquity of the brand, making it less exclusive.
Another interesting point raised in the article is the "hierarchy" of the customers. The book divided them into luxury gourmands (the high-net worth individuals donning designer items 24/7), luxury regulars (who are on a staple consumption, but not as high as the HNWI), and the luxury nibblers (who "partake in a few small bites of luxe every season, a bag here, a watch there, whatever they can afford"). This is not exclusive in China's case, but as said in the article, the mega wealthy wanted "more exclusive" items, which clearly supports the fact that China is still on the 3rd stage that even if there's economic growth, wealth is still disproportionately distributed that they still want to outdo one another, and there's a stark difference in their consumption pattern.
Source: The Cult of the Luxury Brands: Inside Asia's Love Affair With Luxury