What is Really Behind China’s Insatiable Craving for Luxury Goods?
No matter how much money some Chinese young professionals earn each month, their desire for luxury goods and lifestyle remains unsatiated.
As another ‘Double Eleven’ shopping festival is approaching, more Chinese consumers are starting to plan their purchases. And huge sums of money will be spent on luxury clothes and bags, Gucci, Hermas, Chanel, you name it. There is a Chinese phrase to describe this behavior called “Duoshou”, and its literal meaning is “chopping off one’s hands”. It is invented for shoppers who can’t help but empty their wallet in an attempt to fulfill their shopping desires.
According to a CNN business report, despite an economic slow down, Chinese consumers’ demands for luxurious items have stayed largely unaffected. In fact, 81 percent of Chinese millennials are willing to pay more for high-quality products. CNN business further projects that as these young consumers are more likely to be the only child in their family, their secured financial status has made it possible for them to spend money on luxury goods – products they surely could have done without.
However, CNN’s story seems to only have covered a part of the ecstasy that young Chinese consumers have on luxury items. While the report took spendings on luxury items into account, the hidden market of fake luxury items and goods remains to be huge in China as well.
With e-commerce spreading to more parts of the country, counterfeit items and goods are becoming more and more common on platforms such as Taobao and PinDuoDuo. The trend has become a huge concern for some brands. Pandaily earlier reported that the Italian luxury fashion brand decided not to join Chinese e-commerce sales fearing the ubiquitous fake and counterfeit products in the country on these platforms.
Gucci’s concern seems to be legit. When searching for words such as ‘Canada Goose’ on Taobao, a link selling Canada Goose sticker captured my attention. It costs around $1 USD to purchase the sticker. According to the item description provided by the e-commerce seller, the sticker fits perfectly in many ways with different clothings. It might be a bit crazy, but economically it makes perfect sense: When it is possible to use $1 to attract people’s attention and jealousy, why bother spending thousands of dollars to buy the real ones at all?
While the sticker example might be seen as an awful outlier, other results coming from the Canada Goose search are concerning as well. Priced starting around $1,000 US Dollars, there are cheaper coats that look similar to the Canadian luxury jacket brand. Clearly, these are counterfeit items made by forgers to make huge profits. Be it from cheating on consumers who have little knowledge of the products, or consumers who are willing to pay less and buy a forged product.
It makes very little economic sense in fact, for an average Chinese working class to go on their blind pursuits to these luxury items. These luxury bags, clothes, and shoes may cost their entire monthly income to purchase, and on some occasions, two or three months’ of income. Yet with the desire of toxic peer pressure on showing off their wealth and status, these consumers dive into the endless struggle and rather meaningless pursuit to items that the average persons cannot afford.
Chinese history teacher Yuan Tengfei explained the origin of many luxury brands originated from Europe in his recent video: “They used to produce stuff for the French royal families, but nowadays average French people are not wearing these stuff at all.” “It is usually Asians that are wearing those luxury items.” Yuan said.
Yuan argues that some people believe that these items are the embodiment of one’s status. However, Yuan argues that such moves and actions are in fact futile. “Luxury items don’t really change your social status. And it is a really painful thing to be interacting with those who are in higher statuses.”
Yuan put up with an example that shows the reality: “When I got invited to a dinner by richer people, they treated me well. But that would put huge pressure on me when it comes to the time to treat them back. It will be certainly embarrassing for me to treat them with cheaper food, but I can’t really afford to eat in that luxurious style.”
“Only dogs’ eyes look down on people.” Yuan used a Chinese proverb to call for people to change their attitudes toward luxury goods and people who wear them. “What is inside one’s trait is much more than how one dresses and looks.” Yuan had another example to mock those who pursuit luxury goods in an excessive manner: “There are people who live in very small apartments, yet they are carrying their Gucci bags when buying groceries. That wouldn’t make people happy.”
And seriously, what is wrong with just wearing some average cloths? At the end of the day, you are still you. Your talent, income, and most importantly, characters and personalities, will not really change because of your dresses and handbags.
However with the aging of the millenials, worship for luxurious brands will be gradually seen as superficial and obsolete. It won’t be long until the trend is replaced by home-made meals, vintage shops and minimalistic lifestyles.
(Featured photo credit to Tim Coghlan)