Yeoh warns that any sort of direct play requires research, but he has some handy tips. He says investors should look at what the Chinese will want to buy during the next decade. He also prefers established Western companies with a healthy exposure to China’s growth, notably luxury-goods companies.

”Generally, you would think that the corporate governance would be better for Western companies,” he says. ”There’s going to be more disclosure, and it’s a lot easier to understand a luxury-goods company generally than some sort of Chinese internet company.

[...] The downside is that the appeal of luxury brands can be fickle, and the saturation of brands could render them unpopular. ”[Shanghai women] always pride themselves as the most sophisticated and elegant and most open to the West,” Yeoh says. ”When they see the mistresses of the Shanxi coalminers wearing Louis Vuitton … they need to be wearing something else.”

See more on luxury demand in China via CDT.

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Post tags: conspicuous consumption, foreign businesses, foreign investments, luxury, luxury brands, middle class, mistresses, urban life
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Many Chinese women will spend far more of their income than their Western counterparts on these magazines and the products featured inside them. According to a 2011 study conducted by Bain & Company, mainland China ranked sixth in the world for spending on luxury goods ranked by country. In 2010, it was a $17.7 billion market. Louis Vuitton, Chanel and Gucci remain the most desired luxury brands.

[…] Lena Yang, general manager of Hearst Magazines China, who oversees nine publications including Elle and Marie Claire, says that the typical reader of Hearst Magazines in China is a 29.5-year-old woman who is more likely to be single than married. She has an average income of about $1,431 a month and spends $938 a season on luxury watches, $982 on handbags and shoes and $1,066 on clothes.

Meanwhile, movie producers in Hong Kong also found themselves contending with Louis Vuitton handbags. From Bloomberg:

In real life, the Hong Kong film producer is losing the fight against a more insidious adversary: the luxury handbag.

Gone are the days when landlords in Hong Kong used movie theaters as a way to draw visitors to malls, says Kong, executive director of Edko Films Ltd. “Now they say ’Get out, we want LV.’”

No wonder, when a Louis Vuitton Monogram Empreinte Artsy MM bag sells for more than HK$20,000 ($2,578) in the city and mall owners get a share of the sale on top of rent.

Read more about luxury consumption in China via CDT.

© Mengyu Dong for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: conspicuous consumption, fashion, luxury, urban life
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Could it possibly be true that a swath of people in China’s big cities is downwardly mobile, if one compared wages with living expenses? I asked Patrick Chovanec, an associate professor at Tsinghua University’s School of Economics and Management in Beijing. Alas, he told me, it’s difficult to find much clarification in China’s famously fudgeable official statistics. (For instance, the official unemployment rate only includes individuals with urban hukous, or permanent residency permits — which excludes the most economically vulnerable.) Still, he noted: “If you perceive that you’re losing buying power — or have rising but unmet expectations — that’s when people get upset.… And this country, for a country growing at over 9 percent, is in a foul mood.”

Indeed, there is a palpable sense of frustration in Beijing, especially compared with the last time I lived here in 2008. You can see it on the dour faces on the metro, hear it in raspy voices at dinner conversations, and especially sense it in the new gruffness of taxi drivers, who no longer think ferrying people around town for 10 yuan, about $1.60, is such a good deal for them (their base fare hasn’t been raised). Still, it’s hard to rage against abstractions. It’s a lot easier to fume at obnoxious people.

No wonder, then, that in 2011 the Chinese media and Sina Weibo (China’s version of Twitter) buzzed nearly every month with salacious reports of China’s Paris Hilton-types — the sons and daughters of the wealthy and political elite, dangling opulent accessories and impoverished judgment — behaving badly in BMWs and Audis and typically expecting to get away with it, to boot.

See also previous CDT coverage of the offspring of China’s elites, known as “princelings,” who present a challenge to the Chinese Communist Party by embracing their wealth and privilege and becoming more visible at a time when the party is attempting to defend its populist image.

© Scott Greene for China Digital Times (CDT), 2011. | Permalink | One comment | Add to del.icio.us
Post tags: CCP, conspicuous consumption, populism, princelings, social mobility
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