In previous years, luxury brands rejoiced in the opportunity to cash in on the opulence and extravagance of Chinese New Year celebrations. As the Year of the Horse gallops towards us, this year may be a slightly different story for a variety of reasons.
Slowing economic growth
Mainland China’s slowing economic growth is having its effects. In addition, the government crackdown on corruption has put a dampener on the extravagant gifts, sumptuous banquets and other gold-plated perks of being a public official. It’s had such an impression that five-star Chinese hotels are now trying to downgrade their ratings so that public officials are able to start using them again.
A more Western attitude to wealth
A new era of Chinese consumption has turned its back on the showy bling of previous decades. It is now considered decidedly déclassé to wear your fortune on your sleeve. To be described as a “tuhao” (nouveau riche) is an affliction to be avoided.
Discretion is the better part of valour
Although Chinese consumers are still keen to project status, they’re tiring of logos and are looking for more subtle alternatives. According to an article by Shaun Rein, founder of China Market Research Group, a group of ultra-wealthy Chinese claimed they found Louis Vuitton items “too common” and “too flashy”. The truly wealthy are now drawn towards less obvious brands. Bottega Veneta is a case in point. Their use of woven leather is a design cue that is only clear to a smaller, more select group of those in the know.
The Year of the Horse heralds an opportunity for brands that are prepared to listen to and adapt to the changing tastes of luxury consumers. Charles de Brabant, chief executive of luxury consultancy Saint Pierre, Braban, Li & Associates in China, has this to say on the subject: “More-educated consumers are a good thing for the brands who are doing their job well. Otherwise having knowledgeable consumers is troubling”.