Why Do Chinese People Like Luxury Goods So Much?

2331 Words Apr 6th, 2015 10 Pages
Why do Chinese people like luxury goods so much? There are two sides to explain, the first side is customer, and another side is luxury brands marketing strategy. For customer side, Chinese people purchase power is increasing year by year. China implemented the reform and opening policy at 1978, this policy accelerated China’s urbanization and industrialization, and then promoted China economic upward flourish; and because of the reform and opening policy, which provided more opportunity to luxury brands to get into China’s market, so Chinese people was given a chance to touch with luxury goods. Secondly, Chinese middle class or rich people regard owning luxury goods as a symbol of social status and wealth. Thirdly, Chinese people have …show more content…
Therefore, Chinese customer regards Calvin Klein and Tommy Hilfiger as light luxury goods, which is still being expensive but compared with Prada and Louis Vuitton, Calvin Klein and Tommy Hilfiger, is less expensive. However, American customer does not treat Calvin Klein and Tommy Hilfiger to light luxury goods, which is just as normal brand like Abercrombie & Fitch. So we can clearly notice that same brand has different price positioning in different countries. The same situation also happens to skin care product. An Estee Lauder advanced night repair serum just sells $62, about 390 RMB; but it can be sold in 1050RMB, which means this product price in China is three times in US. Price. For this reason, more and more Chinese customer likes buying luxury goods overseas, especially in Hong Kong and Macau or other travel destinations. Since overseas price on luxury goods is cheaper than China mainland, which relates to the different taxes and China stiff taxes. In order to “recall” Chinese consumer back, the China government plans to reduce some of the tax. Why Chinese people like buy luxury goods overseas? The biggest issue is overseas price is more cheaper than China mainland. In most Chinese people‘s eyes, high price is because of high tariffs. But in my opinion, this is a widespread misunderstanding of Chinese people. In the Chinese market, accounting for about 5% tariff up to the final retail price of luxury, high
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