China Spenders Choose Discreet Luxury

Extravagance may be viewed unfavourably as the ruling party continues its push for a “Common Prosperity”.

Kate Lin, CAIA 15 November, 2021 | 15:58
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As incomes continue to rise in China, a bigger group of people have entered the cohort of potential luxury buyers, a tailwind that many global brands have not overlooked. However, luxury sales growth would seem to have met a speed bump under the Chinese government’s pledge to achieve “common prosperity”.

The common prosperity push encompasses efforts to ensure a fair distribution of wealth on the mainland. And the private sector is not far behind in embracing the theory – at least outwardly. In August, regulatory onslaught on various sectors including video games, education, and casinos collided with Chinese tech leader’s announcement of their intention to give away billions to support social initiatives. With a top-down agenda and a vow to reach social equity, Morningstar analysts expect consumers to rein in purchasing items with an air of extravagance.

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About Author

Kate Lin, CAIA

Kate Lin, CAIA  is a Data Journalist for Morningstar Asia, and is based in Hong Kong

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