A recent article in the LA Times has caught our attention, mentioning that Chinese bought more Lamborghinis and Rolls-Royces than anybody else in the world. And then there was a phrase that have summed it all: “China is on the verge of becoming the leading market for just about everything over-the-top expensive.” But then Japan, circa 1980s was very similar.
Here are some of the article’s passages:
Gucci’s sales in China in the first half of 2011 were up 39%; Bottega Veneta’s more than 80%. Prada plans to open 50 shops over the next three years.
Chinese fashionistas are displacing those immaculate Japanese women in their Burberry scarves as the world’s leading consumers of luxury goods. The consulting firm McKinsey & Co. projected that China will bump Japan out of first place by 2015 as the leading market for pricey goods. Even with the softening of China’s real estate market, the source of much new money, some analysts believe the Chinese already top the luxury market.
Young women post photographs of themselves on microblogs with their Hermes handbags. The son of an auto tycoon uploaded on the Chinese equivalent of YouTube a video made from behind the wheel of his $4.5-million Bugatti Veyron sports car as it wove through traffic in the southern city of Chongqing.
Cynism and Corruption
Chinese officialdom has something of a love-hate relationship with luxury goods, officials relishing their own creature comforts while deploring anyone else doing it too flagrantly. China still has 150 million people living on less than $1 a day. And it maintains some of the highest taxes in the world on luxury goods, adding as much as 60% to the cost — which is why rich Chinese have become such prodigious shoppers abroad.
The word shechi, or “luxury,” is banned in advertising and company names, said Ouyang Kun, who runs a trade group in Beijing called the World Luxury Assn. “The government feels luxury items are only affordable for a few people. They don’t want to create unharmonious feelings among the people,” he explained.
The Chinese equivalent of Rodeo Drive is a four-block strip in the heart of old Beijing along Jinbao Street, whose name appropriately means “gold treasure.” The street was built in 2002 out of two traditional hutongs, or alleys, one named Jinyu, or “goldfish,” and the other Yaba, or “mute man,” part of a larger redevelopment project that displaced more than 4,000 families.
Over-the-top: US$200k toilet and a US$300k cake
… a Bottega Veneta handbag made of African crocodile skin can set you back $51,000 and a jewel-encrusted cellphone $132,000.
Expensive simply for the sake of expensive is all the rage. At a trade show on the resort island of Hainan in November, promoters unveiled a gold-plated toilet costing more than $200,000.
The recently opened Black Swan Luxury Bakery made headlines with a multitiered, cream-swathed wedding cake in the front window with a $314,000 price tag.
Politicians are frequent … In September, an activist published a report on the wristwatches worn by government officials based on publicly released photographs that he blew up and analyzed. Most flashy was the railroad minister, Sheng Guangzu, who appeared to own at least four luxury watches, including a Rolex, worth a total of $62,000.
History merely repeats itself…. let’s hope this time is different.