Perspectives
At first glance, the rise of China’s luxury goods business seems to defy logic. On the one hand, the country’s per capita GDP is ranked 94th in the world – behind countries like Jamaica and Bosnia; on the other, it is expected to soon overtake Japan and the U.S. as the world’s largest luxury market. The quick and easy explanation for the paradox is that standards of living and income levels are rising along with China’s economy, producing a growing number of millionaires and billionaires. But there’s more to what’s fuelling China’s US$12 billion luxury goods sector than simply having the means to consume. As with other discretionary purchases, retail experts say buying designer clothes, jewellery and other high-end goods in China is also driven by emotions, culture, social values and a certain amount of political baggage.