China’s economic growth is undeniable. In 2015, China became the country with the most individuals worth at least $1 billion. With the rise of Chinese wealth comes the rise in Chinese consumption as well. This is especially notable in luxury markets. Chinese consumers account for a third of luxury and fashion sales.
This consumerism is set to further increase. There is opportunity for growth in China’s upper middle class, a group which is interested in luxury goods. This is not restricted to possessions; there has been an increased interest in luxury services, such as spas. While China is often associated with counterfeits, these luxury consumers want the real thing. One woman who purchased a luxury handbag said ‘it would be meaningless if it was fake.’ Chinese consumers are also interested in foreign brands. In fact, when purchasing luxury items, ‘an internationally well-known brand has become one of the most important factors.’
Chinese consumers accounted for 29 per cent of purchases last year, making them the biggest buyers of expensive items. The majority of this spending takes place outside of mainland China, with a fifth of it in Europe. This indicates the interest of Chinese consumers in shopping as they travel. Indeed, Chinese travellers dedicate 58 per cent of their travel budgets to shopping. Reportedly, when travelling abroad the etiquette is to tell your friends beforehand and to take along an empty suitcase.
After the government crackdown on corruption in 2012, there has been a stylistic move away from ‘blingy’ items. Sales of Bordeaux wine and cognac fell after associated campaigns targeting gift giving and some mainland sales have been affected. Overall, however, expansion has not been stopped. Apple, for example, now has more stores in Shanghai than in San Francisco.
Accompanying this, the younger generation’s tastes are evolving away from the previous generation’s flashy styles. They are less interested in luxury goods as symbols of wealth, and more oriented towards quality. Brands with affordable luxury might do best, appealing to both ‘the upwardly mobile and the “post-luxury” elites in the cities, who want less flashy brands.’
The changing tastes of younger Chinese luxury consumers on the market points to the need for creativity in both design and marketing. Chinese taste has already begun to shift luxury markets. Western jewellers, for example, are now beginning to adjust their product design to take Chinese consumer interests into account. Jade, for example, is becoming more commonly and prominently used. Simultaneously Wallace Chan, a Chinese jewellery designer, has become extremely successful; in 2012 he sold a necklace for £56 million.
There has been a growth in Chinese consumers interested in the art market as well. China is now the second biggest art market in the world. In 2014, 27 per cent of Christie’s global auction sales came from Asian buyers. This has prompted major auction houses such as Christie’s and Sotheby’s to open Chinese branches. China’s art market now has a well-established base of collectors interested in investing in and collecting art. This interest was strong enough in the case of Liu Yiqian and Wang Fei to prompt them to start a museum to increase Chinese access to fine art. Though some major purchases of Western art have been made by wealthy collectors Chinese collectors tend to be more interested in Chinese art. This interest, combined with the new influx of wealth into the Chinese art world, is pushing up the value of contemporary Chinese art pieces. Chinese photography is also a newly popular area of investment, as prices are still relatively low at the moment. Chinese artists are being increasingly appreciated world-wide as well. The Musee d’Art Moderne in Paris recently showed a major retrospective on Zeng Fanzhi’s work, while the 2015 Met Gala’s theme was China: Through the Looking Glass, which looked at the impact of China on Western design.
Liu Yiqian, the aforementioned Chinese billionaire art collector who recently bought a Modigliani at auction for $170 million, said ‘The message to the West is clear: We have bought their buildings, we have bought their companies, and now we are going to buy their art.’ Markets are increasingly being influenced by Chinese consumers, and more broadly, by non-Western consumers; India’s luxury market is growing quickly as well. As this influence grows, those markets will adapt to fit the demands placed upon them. In the realm of art and luxury, this might entail significant changes in areas which Western culture and Western consumers have comfortably dominated for centuries.
The rise of Chinese interest in art and luxury ties in with the West’s anxieties about the rise of China generally. Even with recent slow growth it is a significant economic power, one which the West sees as both an economic and ideological competitor. Meanwhile, the new value of Chinese art is part of a slowly developing soft power. The combination of both soft and economic power is a potent one, well-suited for a state on its way to becoming a great power. Just as Western powers will need to adjust to China’s new power, individuals are now having to adjust to cultural changes in art and luxury markets. This is not necessarily a bad thing.
An article in Time argues that the rise of China’s economy could be good for the world. Joseph Nye, who created the concept of soft power, likewise argues that one state’s development of soft power need not be a loss for other state, but rather that development of soft power can lead to more cooperative, less conflictual relationships and thus to mutual benefit. In the art and luxury world, this might diversify the design and marketing of top luxury brands. In other words, this could be a chance for increased creativity. The growth of Chinese consumption may be a chance for increased innovation.