with Luisa Tam
Can luxury brands give more a taste of the good life?
A different kind of revolution is brewing on the mainland. It's a consumer rebellion that is slowly sweeping the nation, demanding a share of the economic success through owning a bit of luxury.
More and more people from the lower-middle class, having contributed to the nation's economic success in the past decades, now want to taste a bit of the good life - even if it's only a tiny fraction of it.
Affordable luxury is all the rage on the mainland at the moment. Industry watchers are suggesting that luxury brands should consider tapping into this potentially huge market.
After all, it makes more sense to sell an 800 yuan scarf to one million customers than an 80,000 yuan handbag to just 100 wealthy mainland tai-tais.
No matter how much the elite spend, they will always be just one per cent of the consumer base while nothing compares to the remaining 99 per cent of potential customers.
The mainland market is vastly different to the European one. Its consumer base is more diverse with customers' ages ranging from 18 to 50, while in the West the majority are above 40.
Even when the consumption of luxury goods fell worldwide during the economic slowdown last year, China's appetite for high-end retail did not subside.
Mainland shoppers splurge well over US$6 billion a year on designer bags, cars, clothes, accessories and cosmetics. China comes in second, behind the US in luxury goods consumption, according to World Luxury Association data. It has even surpassed fashion-conscious Japan in recent years.
Mainland consumers can be broken down into three demographics - the super-rich, the upper-middle management people earning between US$200,000 and US$300,000 a year, and the army of office workers making about US$600 or more per month.
It is this third group that is more willing to open their wallets and has an insatiable appetite for luxury items, but at affordable prices.
Luxury brands should take notice of this consumer sentiment, which is indicative of an economy that has developed a class of people who are eager to show off their wealth.
Luxury products still belong to an exclusive few in society and their consumers are extremely conscious of their social status and class, which means any low-price strategy will damage the integrity of the brand.
But, affordable luxury does not equate to offering discounts and will not devalue the brand. It's all about adapting to market changes.
Predicting the future
We have discovered the secret to PetroChina chairman Jiang Jiemin's success in presiding over the most successful and profitable company in Asia - he has a crystal ball.
When asked by reporters at his company's annual results briefing yesterday whether he would soon be appointed by the central government to a top job in Xinjiang province, Jiang (pictured) replied: 'Definitely not because I will see you all at next year's annual results briefing.'
We think if he can really predict the future, there is no need to wait a year, just tell us this year's results now.
Just a snip at US$33 million
An anonymous mainland billionaire has snapped up a luxurious penthouse in Manhattan for a record-breaking US$33 million. Market sources say the mystery buyer, believed to be in the manufacturing business, completed the transaction on Monday.
At US$6,000 per square foot, the 5,500 square foot apartment on the top floor of the famed Trump International Hotel and Tower is now the most expensive residential unit in the exclusive Manhattan area. Lai See thinks it's definitely a bargain compared to some of the house prices in Hong Kong.
Mind you, the price is so reasonable that we suspect any middle-ranking mainland official can easily afford one or two.
A pricey financial education
Some good people at Citibank have come up with the ingenious idea of teaching investors how to take better control of their money and fend off bank cheats.
The bank yesterday launched a financial education book series titled Managing Your Wealth. Promoted as 'an all-encompassing financial education bible', the six-volume series, priced at HK$564, will also be on sale in major cities across the region.
Lai See thinks it's a bit pricey. There is no need for any manual. It would be more effective just to give customers a list of banks approved by the government and a big stick.