Luxury Marketing: Symbolic Consumption and Conspicuous Consumption

The reason why luxury goods marketing is popular in the Chinese market depends on changes in the Chinese people’s consumption patterns. Chinese consumption and lifestyle are increasingly being replaced by enjoyment and self-development. The pursuit of fashion, image, personality and self-development is gradually becoming the desire and demand of a new generation of consumers. Symbolic consumption is becoming a new trend.

Symbolic consumption has two meanings: The first is the "symbol of consumption." That is, it uses the consumer's consumption to express and convey certain meanings and information, including the status, identity, personality, taste, taste and identity of the consumer. The consumption process is not only meeting the basic needs of people, but also the process of social expression and social communication. The second is "symbolic consumption." That is, consumers not only consume the goods themselves, but also consume some of the social and cultural meanings that these goods symbolize, including mood, beauty, atmosphere, style and sentiment at the time of consumption. Due to the unique culture and psychology of the Chinese people, the symbolic consumption pursued by the Chinese people is more like conspicuous consumption.

What is conspicuous consumption? As early as the 1899 publication of "The Theory of Leisure Class", the economist Veblen put forward the concept of "conspicuous consumption" for the first time. Veblen believes that to be honored and to maintain honor, it is not enough to only retain wealth or power. With wealth or power, it must be able to provide proof. Because honor is obtained through such proof. Conspicuous consumption is a consumer activity that provides proof of wealth or power to gain and maintain honor.

However, this ancient topic, until the 1960s, due to sociology, consumer behavior and marketing scholars borrowed from the relevant studies of economists, and the introduction of psychology and sociology methods, especially for conspicuous consumption It is the study of luxury goods consumption and marketing that has made substantial progress. It can be said that as the society becomes richer, it is more and more important to show off the goods. The international marketing community generally believes that China, with rapid economic growth, is the country with the greatest potential for luxury goods consumption. Coupled with the unique Chinese culture and consumer psychology, conspicuous consumption has become one of the important motives for many Chinese people’s consumption behavior.

In recent years, the penetration of foreign high-end luxury goods in the Chinese mainland market has rapidly expanded. Most of these luxury goods have long been known in the Hong Kong retail market, and these luxury brands are still limited in the awareness of the Chinese mainland market. However, luxury shopping malls in the economically developed regions in the Mainland, such as Shanghai, Beijing, Guangzhou and Shenzhen, have developed rapidly, and luxury goods sales are also promising.

Why is it so important for a country where the economy is not yet available to have a large impact on luxury goods consumption? This is mainly due to the conspiring consumer psychology of the Chinese people. Some people say that the symbolic consumption of foreign fashion has little influence on the people of the country, but conspicuous consumption has a greater impact. This is the reason.

Currently, Chinese luxury consumers have similar characteristics with Japanese luxury consumers 10 to 15 years ago. For example, such consumers have a greater degree of consistency in terms of significant increases in consumer spending, like-brand, high-reputation products, and high value represented by the dress code.

Currently, Chinese luxury goods consumption accounts for about 12% of the global sales of the luxury goods industry, and most of them (about 10%) come from the overseas tourist consumption of Chinese tourists. Researchers expect that in 2008, China’s luxury consumers will contribute 20% of the industry’s total global sales; by 2015, Chinese consumers will become an equally important luxury consumer group with Japanese consumers.

According to relevant statistics, Swatch and Louis Vuitton - Hennessy will benefit from China's strong demand growth in the two major brands. Swatch Group has entered the Chinese market since the early 1970s and has three major watch brands: Omega, Longines and Radar. Chinese consumers are already familiar with these brands. Omega has been approved as the only official chronometer designated for the 2008 Beijing Olympic Games, which will greatly increase the brand's visibility and enhance its competitiveness.

Louis Vuitton, an industry leader in leather products, has been on the Chinese market for more than 12 years and has the advantage of being a pioneer. In addition, Burberry may also benefit from its strong advantage in men's clothing. Due to its low pricing, Burberry has a large customer base. Similarly, Gucci may also benefit from the strong demand for luxury goods from Chinese consumers.

However, there are exceptions, such as the jewelry industry will not receive greater returns. Some studies have concluded that jewelers and very expensive brand products receive little benefit from it. Because China's import tariffs are high and consumers do not know much about branded jewellery, jewelry brands like Cartier and Bulgari won't gain much from the Chinese market.

Studies have also shown that overseas consumption of luxury goods is an important aspect of Chinese people's conspicuous consumption. Because Chinese people like to spend money on travel. The increase in the number of Chinese tourists visiting overseas in recent years will greatly increase the sales of luxury goods. Since September 2004, most countries in Europe have been approved by the Chinese government to become destination countries for Chinese citizens to travel abroad. Hong Kong is the earliest beneficiary of mainlanders overseas travel. However, countries such as France and Italy will soon become the countries that Chinese people most like to travel to. Overseas travel also allows Chinese tourists who did not have much opportunity to contact luxury brands before to gain more knowledge of these brands. Since the beginning of 2005, the number of Chinese tourists allowed to travel overseas has been twice as much as before.

From the psychological perspective of consumer brand awareness, travel to foreign countries will also greatly increase consumer awareness of the brand. Many branded products will only have a deeper understanding of local tourism. Nowadays, traveling to Europe is advantageous because of its geographical advantages (adjacent to the mainland) and attractive prices. On the other hand, it can also allow consumers to reach out to world-famous brands from a distance. In particular, France and Italy will soon attract a large number of Chinese tourists who are actually shoppers.

Studies have shown that Chinese people spend at least twice as much on shopping abroad as they do when traveling abroad. This is because overseas luxury goods have attractive prices. Chinese consumers are generally more sensitive to prices. Usually, if it is easy to obtain the lowest price, Chinese luxury consumers are particularly keen to find the lowest price of the brand. At the same time, foreign luxury goods are the best choice for gifts. Giving gifts is an important aspect of Chinese culture. When Chinese tourists travel abroad, they will often bring back some representative gifts from the countries they have visited, especially those branded products that they could not buy in China. People to show themselves to those developed countries. This psychological satisfaction is not money can buy.

Of course, luxury marketing still has a long way to go in China. At present, most luxury goods dealers are actively expanding the Chinese mainland market. Compared with Hong Kong and Europe, the variety of imported luxury goods in the Mainland market is still limited, and some brands do not sell all their products in the Chinese market. This is also the reason why Chinese tourists purchase luxury branded products that are not available in the Chinese market while traveling abroad. Also, China's retail network is less developed (mostly concentrated in large integrated shopping malls), while the foreign "shopping experience" is more complete and more attractive.

The brand image construction may be one of the important strategies for the development of luxury goods in China in the future. Well-known brands need consumers to build brand awareness and enhance brand awareness. The current expansion of luxury brands in the Chinese mainland market is more to build their own brand image in the new generation of Chinese consumers, rather than simply seeking profits.

Although there are still many difficulties at present, we should see that perhaps ten years later, Chinese luxury consumers will be the third largest consumer of luxury goods in the world. Dealers should look away.