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Luxury Consumption in China - Literature review Example
Since the emergence of different marketing mediums, the trends towards buying luxury branded goods has increased dramatically across the globe. …
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).