Publisher guides mainlanders on luxury with Chinese characteristics
Le Yaohui talked to He Huifeng
In the global luxury industry, China 'is the hero of the moment' while most developed countries are struggling against the economic slowdown. With sales of luxury goods on the mainland expected to exceed US$15 billion in the next five years, China will become the world's largest luxury market. In the latest wealth boom, luxury magazines have become popular and lucrative items on the mainland. The desks of the well-to-do are piled high with dozens of lush, glossy magazines that tell them how to spend their millions. Le Yaohui , who founded a luxury website and the magazine Privateluxy, talks about the phenomenon and these ventures.
Who are the luxury consumers on the mainland?
The answers will be different on the mainland. Some say it's multimillionaires such as private entrepreneurs, film stars, mine owners and bankers, but many young people also spend several months of salaries on luxury handbags or cosmetics. The Chinese tend to like status symbols. They like to reward themselves and show the world their achievements. Therefore, they prefer recognisable brands and products with logos. Chinese consumers will pick the biggest luxury brands first, then move into more niche markets later. We will see Beijing and Shanghai tire of leading luxury brands when second-tier cities start buying them. No matter how the development goes, what is clear is that buyers in top cities are keen to show off not only their wealth but also their unique taste and knowledge of brands. As more buyers in top cities enter the market, the wealthy people who love the top brands may look elsewhere as they try to set themselves apart. But so far, luxury products are all overseas brands to Chinese people.
How is the current market in China for a luxury magazine?
There have been a number of newly launched luxury media outlets in the past couple of years. I estimate there are more than 60 luxury websites and about four or five luxury magazines designed for the Chinese. Before, such magazines were usually in English or traditional Chinese [for Hong Kong and Taiwanese readers]. Now more people joining the market are printing simplified-Chinese editions.
Do you see much room for growth?
Absolutely. Wealth creation is the main driver of growth in the luxury industry, and private wealth is rising fast. China had 900,000 millionaires last year, and their average age is much younger than those outside the country. I bet the number of luxury media outlets will keep rising as more Chinese join the millionaires' club and need luxury products and some direction on how to live and spend like a millionaire.
Who are your readers?
Our monthly magazine targets affluent readers between 35 and 50 years old in the Pearl River Delta. We have no income standard to distinguish them from common people. But they are wealthy and have luxury cars and private bank accounts. Many are private entrepreneurs or in senior management in Guangdong, especially in the delta. We have a subscriber base of 2,000. We also deliver 50,000 copies per month to potential rich folks, and we partner with banks and car dealers to reach their high-end clients.
What makes your magazine unique?
We want to create a luxury culture or brand with Chinese characteristics. It will be very embarrassing if China doesn't have its own luxury brands as it becomes the world's largest luxury market in the future. But Chinese rich people are not discerning when it comes to consuming luxury products. Many have no idea what luxury is about. Cost and foreign brands are their only standards. Many luxury magazines and websites introduce only Western brands to readers or offer an overseas outlook with insider and expert knowledge in the realm of fine dining, gourmet travel and high fashion. Our magazine focuses on promoting traditional but exquisite Chinese handicrafts, which represented status symbols and cost a lot in the past. I believe China's first luxury brands will come from these 'period' handicrafts. These unique things are absolutely what the richest people look for in China.
What are the barriers to the growth of the Chinese luxury industry?
The most difficult part about the luxury market is a lack of government support. The authorities have a very low-profile attitude towards the luxury market as the gap between the rich and poor keeps widening. That discourages Chinese people from investing and promoting luxury businesses on the mainland.