Branding Luxury in China

When Culture Matters

A group of people walking on the street.

China’s economic growth over the past twenty years has driven double-digit growth in the luxury brand sector, motivated by desire of newly rich Chinese consumers for the ostentatious display of personal wealth and the modernism represented by the West. Our research discovered that status and ostentatious display are rather weak motivations for long-term brand loyalty, because they do not require deep commitment to the ethos and persona of any one brand. Furthermore, the emergence of a national cultural identity in China has given rise to new local brands, preferences for luxury goods that align with traditional Chinese culture, and cultural branding oriented to the collective nature of Chinese society.

Results: The research prompted the European client to consider brand extensions, new products, and culture-sensitive branding initiatives to withstand a recent decline in the market for western luxury brands.