Despite of these challenges, the luxury industry still is becoming highly attractive as the affordability of consumers is also increasing. As the middle class in the world is gaining strength and becoming more loyal to luxury branded goods, luxury industry still have a number of lucrative market segments to be catered. It was estimated in 2003, that the financial returns of luxury goods manufacturing industry globally was $ 90 billion, which crossed the $ 150 billion mark in 2007. By offering services and products to the untapped market segments, the luxury industry is expected to increase the size of its returns by $ 400 billion by the end of year 2015 (Heaney et al., 2005).
As the size of luxury branded goods industry is increasing, the format of business is also changing. Now, luxury goods manufacturing businesses are no more privately or family owned business, but transforming into public limited companies. In this manner, the luxury branded goods industry is attracting investments from all around the world which enables them to invest heavily on research and development to understand consumer behavior. Understanding consumer behavior is essential for expanding the size of luxury businesses into untapped international markets. The understanding of consumer behavior has delivered its fruits in recent years, which is evident from the dramatic expansion of industry’s size in India, China, South Africa and Brazil. Especially China has remained the front runner, where consumers are becoming more brand conscious and spending lavishly on purchase of luxury branded goods (Michman & Mazze, 2006).
Especially China has remained the front runner, where consumers are becoming more brand conscious and spending lavishly on purchase of luxury branded goods (Michman & Mazze, 2006). Being the fastest growing economy in the world, China offers the biggest market place to luxury brands. The increase in the economic development has resulted in the increase in personal incomes of Chinese consumers. Due to this, a large section of the consumers has formed a market segment which is wealthy and social stimulators, which is described as the “new rich”. This segment of the market has the tendency to live a celebrity lifestyle and satisfy their desire for expensive and sophisticated goods and services (Dubois et al., 2005). According to a research of Ernst and Young, it was estimated that by the end of 2015, China would account for 29% consumption of luxury goods and services in the world. This rate of consumption would cause China to become the 2nd largest consumer of luxury goods and services in the world. This is the reason, that heavy investments are made by luxury brands to understand the consumer behavior of Chinese consumers, so that the product and marketing strategies can be developed accordingly (Ernst & Young, 2005). Keeping in view the lucrative opportunities available to luxury brands in China, a number of these brands has installed production facilities in the country. These include Bally, Gucci, Ferragamo and Luis Vuitton. Other brands like Zara, Jimmy Choo and others are preparing their action plans to enter Chinese market as a local producer of luxury goods, to take full advantage of lucrative opportunities in the country. Beside factories in China, a number of luxury brands have their subsidiaries, operational facilities and stores in ...
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The study aimed at reviewing literature by investigating the consumer behaviour and what influences them. The literature review focuses on information from China and UK that identifies the consumer behaviour. The study looked at some areas that could help identify the actual consumer behaviour such as attitudes, perceptions, beliefs and values.
Conclusion 16 Reference 18 Bibliography 21 1. Literature review 1.1. Introduction China has become one of the important parts in the global economy and no investor or business leader seems to ignore the influence of consumer in China. The preference and taste of Chinese consumers tends to sway demand and thus spend trajectory of the global consumer spending (CNBC, 2013).
The Chinese are the fourth largest minority group residing in Britain following Indians, Pakistanis and Black Caribbean (Bailey et al., 1994). Furthermore, China also has the fourth largest consumer base of affluent households in the world (He, Zou & Jin, 2010), these need to be considered as well because of their ability to travel to and invest in education in UK.
A review of literature was conducted to provide a conceptual framework for interpreting the data collected and as a frame of reference for what is known and assumed about Chinese consumer culture and attitudes toward foreign women’s magazines. This chapter is therefore divided into five main parts: consumer culture in China; magazine readership in China with an emphasis on how Chinese women are reading/using and engaging with magazines; differences in readership along demographic lines; contents of magazines; and the relationship between magazines and consumption.
Although there are sufficient amount of research works exist which have tried to investigate consumption motivation among customers for luxury items but most of these studies were conducted in context to developed nations from North America and Europe. Interesting fact is that most of the researchers skipped luxury consumption of Chinese customers but economic evidences and sales of luxury goods in China is suggesting that ignoring the red dragon might not fill the gap in literature regarding luxury consumption in convincing manner.
The period from 1995 and 1999 is considered to be the phase of boom for the luxury market, when the Compound Annual Growth Rate (CAGR) was 11 percent. However, CAGR was 1 percent during the period of consolidation of the luxury goods industry between 2000 and 2003.
The evolution of the telecommunication technology since the beginning of the previous decade has played a massive role in introducing a wave of technological advancement and sophistication in the lives of the masses all around the world. It is important to mention that the high penetration of the internet in the last couple of years, along with the factor of steady acceptance of various kinds of sophisticated high end gadgets like the Smartphones, tablets, laptops etc has resulted in bringing a major transformation of technological nature in markets around the world.
It is a huge business and engages large number of peoples with variety of skill and talents in order to offer the customers with wide range of fashion apparels. The front line customer service staff, which includes “Designers, new product developers,
It is assumed that the young people drink in order to attain values outcomes. As per ( Kuntsche (2006,pg.1844-57)) “A previous review revealed that most adolescents reported drinking for social motives, some indicated enhancement motives and only a few
patterns has always been a challenge not only for new investors who intend to enter the market but also those companies that are already established in the market. There is evidence of strong influence of culture, economic status and age group in the consumption patterns. The
15 Pages(3750 words)Literature review
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