Date: 12/2/09
NEW YORK (AdAgeChina.com) — Chinese researcher Patricia Pao, who specializes in luxury marketing trends in China, offers ten tips to help advertisers reach affluent customers in the mainland.

1. Don’t ignore quality
Until the current recession, the Chinese appetite for luxury goods was so strong, luxury goods manufacturers could get away with doing little more than putting a label on merchandise with little regard for quality and value. Today, consumers are much more discerning about how they spend money and demand that luxury goods manufacturers provide quality.

A study conducted this year by Pao Principle shows mainland consumers no longer only care about logos and brand names. They buy luxury goods because they believe the quality is superior to comparable substitutes.

Over 88% of the study’s 448 panelists — all high net worth individuals, mostly women aged 20 to 39 — said they “strongly agreed/agreed” with the statement, “I buy products where design, quality, durability and performance were remarkably superior to other products.” Read More

Date: 11/25/09

By: Valerie Seckler

The X factor in China’s burgeoning luxury consumption is the country’s one-child generation — a group of people who tend to be highly individualistic and perceive luxury goods as a way to set themselves apart.

The population policy, in place in China’s cities for 30 years, has created a value system among these millions of only-children that is “more self-indulgent and self-interested” than the more communal ways of their predecessors, said Patti Pao, president and founder of strategic consultant Pao Principle and author of a new “China Luxury Panel” report.

“The one-child generation will have a huge influence,” said Pao, who was born in the U.S. after her parents fled Mainland China for Taiwan when the communists took power in 1949. Theirs is often a sensibility inclined to “bring on the Balenciaga, bring on the Yves Saint Laurent,” she added, in contrast to the rising tide of young adults globally who are clamoring for the fast-fashion, designer one-offs of stores such as H&M and Zara, and the cheap chic of players like Uniqlo.

Young adults reared by mothers and fathers who were “prodigious savers,” the urban Chinese in their 20s and 30s are receiving some funds from their parents — cash flow that is propelling luxury spending, said Michael Silverstein, a senior partner and managing director at The Boston Consulting Group, who visited Beijing and Shanghai in the summer. “The vast majority of luxury goods [in China], around 75 percent, are purchased by people under 40,” he said. “This is a young movement.” Read More