After years of chasing the mythical wealthy Chinese consumers, Western luxury retailers start to leave China

dunhill store asiaFamous luxury brands have dreamed on the Chinese market for the last twenty years. Ignoring common sense (China remains, per capita, one of the poorest country in the World), they decided to open massively luxury retail stores chasing the mythical wealthy Chinese consumer.

It’s time for a reality check.

China has recorded the most number of closures of luxury stores between July 2016 and July 2017, the latest report by the investment research and management company Bernstein shows. The report, titled “Store Wars,” based its findings on Bernstein’s tracking of about 7,000 stores referring to 36 luxury brands including big names such as Burberry, Saint Laurent, and Céline. Burberry and Dunhill had the most store closures in China of all the brands during that period.
China has seen 62 net closures of luxury brand stores during the surveyed period, the largest number observed by Bernstein among all significant geographies. The firm viewed the trend as a revision of the over-expansion, in previous years, of luxury brands into the Chinese market.

The rapid development of the country’s luxury industry fueled by affluent Chinese consumers has given luxury brands unrealistic projections of retail sales in the past. This over-estimation, according to Bernstein, has led them to aggressively open retail stores in China that exceeds consumers’ real purchasing power. The same situation occurs in the Middle East region, another area where luxury consumption is rising fast.
Globally, the number of the net store openings by luxury brands has also for the first time run into the negative territory. The report said most brands have more or less closed some of their stores in the department stores, a traditional channel that accounts for about one-third of these brands’ global sales.

Chinese consumers have demonstrated some remarkedly different purchasing behaviours from that of the West. According to Pierre Gervois, a leading expert about wealthy Chinese travelers’ shopping behavior, and founder of the prestigious STC magazine “Western luxury brands have been warned since 2010 that their projections about affluent Chinese consumers were grossly exaggerated.” “Brands refused to acknowledge that their future Chinese customers would buy in overseas stores  rather than in domestic stores, both for tax reasons but also because of the poor customer service in their Chinese stores”, Gervois added.

The really affluent Chinese consumers (as affluent as an average U.S. or Western Europe consumer) massively choose not to purchase in Chinese stores, neither online in China.  They choose deliberately to purchase overseas, as a sign of social status.

Another distinguishing habit that sets Chinese luxury consumers apart from Westerners is their huge interest in buying luxury items online. Over the past year, an increasing number of luxury brands have embraced the e-commerce marketplace and launched stores with the country’s top two players, Alibaba and JD. Moreover, big names like Louis Vuitton and Gucci even opened their own Chinese e-commerce stores to ensure their offerings meet the expectations of Chinese consumers. And then there’s the nature of luxury itself, the meaning of which is different to younger consumers from what it was to their forebears.

Another concern that Western brands cannot officially recognize in China, is that a growing part of affluent millennials Chinese are moving from government-censored social media (WeChat, Weibo…) to Facebook and Twitter throughout an increasing use of VPN’s. That makes much less relevant their communications campaigns on Chinese networks.

Source:  Chinese Tourists Blog / JingDaily Blog / Bain / Bernstein

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Targeting Affluent Chinese shoppers the Bloomingdale’s way: Talking to the heart of Chinese tourists planning a U.S. trip

Bloomingdale's Interviews -Shanghai Travelers Club May 2015 -7The growing purchasing power of affluent Chinese travelers is making it more important than ever for luxury brands and luxury retail brands to adopt marketing strategies to target them. With Chinese third-party mobile payment systems like Alipay and WeChat Pay beginning to set up shop in popular global tourist destinations, catering to this traveling consumer is becoming easier to do, but it’s not a brand’s only option.

Digital intelligence firm L2’s recent report “Cross-Border and Travel Retail: Connecting Digitally with China’s Shoppers” discusses ways brands can be targeting consumers online both during their journey overseas and before they set off.

“[Luxury brands] are under-serving the traveling Chinese consumer, whether it’s through their own brand site and its functionality and capability, their WeChat account, or from leveraging things like WeChat Pay and Alipay,” said Danielle Bailey, head of Asia Pacific Research at L2. “It’s a huge missed opportunity for them to not engage on these platforms that Chinese consumers are using all the time. Their phone is their number one travel accessory.”

Brands that do engage consumers digitally abroad with an omnichannel approach are using platforms like Alipay’s “Overseas Travel Channel (支付宝境外游)” to give travelers exclusive gifts, better exchange rates, or let them find deals near where they’re going, all within the app on their mobile device. WeChat’s website within an app feature gives consumers the opportunity to reserve a product online to pick up in a store and access store locators in their own language that they can hand to a taxi driver en route.
But about half of Chinese travelers are doing research on what they want to buy abroad before they leave, and luxury brands have been adopting strategies to target these consumers, according to L2.

Bloomingdale's Interviews with Chinese customers -Shanghai Travelers Club May 2015 -4In a dissent opinion, Pierre Gervois, Publisher of the STC magazine, a digital travel media in Chinese Mandarin, said “The most important for retailers is not the way Chinese shoppers are going to pay. It’s a technicality. Chinese Customers who want to make a purchase have plenty of options: Cash, credit Cards or WeChat Pay.  The really important thing to do is to convince them to choose a particular retailer”
“Too oftenly, we see U.S. retailers being obsessed by Chinese mobile payment systems when their strategy should be focused on branding their image to Chinese millennial travelers, and create an emotional connection with their future customers, based on their brand values”, Gervois added.

A good starting point is to provide an international store locator on their official online store in China, a strategy about 72 percent of brands employ. However, brands can also take it a step further by adding a Chinese-language travel retail site that let shoppers research the products, compare prices, read reviews, view maps that direct them to duty free shops, and even let them purchase the product online in advance so that they can simply pick it up at the airport if they’re in a hurry.
To help consumers find these pages, brands are paying for search term generated Baidu ads. L2 lists the efforts of beauty brands as an example—many brands pay for cosmetics-related key words, while others, like Lancôme, are taking a more travel-centric approach, targeting consumers researching phrases like “South Korean vacation.”

Some high end retailers, such as Bloomingdale’s, choose a more qualitative approach, and advertise in luxury digital travel publications about the U.S., like the STC magazine, available for mobile but also in digital inflight entertainment.

Bloomingdale's Interviews with Chinese customers -Shanghai Travelers Club May 2015 -3With a very creative advertising campaign created by China Elite Focus Magazines in New York, they organized interviews of actual Mainland Chinese customers while shopping at their Third avenue flagship store.  The story of six actual Chinese Bloomingdale’s customers has been published in the digital edition of the STC magazine: It has much more impact than buying keywords on Chinese search engines and directly talked to the heart of Chinese consumers.

While maintaining an engaging physical presence in airports and shopping malls is always important for marketing to the Chinese shopper abroad, brands that understand how to make the most of China’s digital sphere are likely going to more efficiently connect with Chinese travelers who are in the process of creating their luxury goods shopping list for their next overseas vacation.

Source: Jing Daily / Skift / Chinese Tourists Blog

Social Media & Shopping Influence for Chinese tourists

Chinese shoppers spendingXiaoyan Mao had not yet collected her luggage after landing at Charles de Gaulle Airport from Shanghai recently. But she and a friend were already mapping out a game plan for the three days they would spend in Paris before continuing a 10-day European blitz with additional stops in Switzerland, Italy and Germany.
Their to-do list included visiting the Louvre and the Eiffel Tower. But what were they looking forward to most on their first trip to the region?
Ms. Mao, 28, a sales manager, smiled broadly. “Chanel,” she said. “Prada.”
Tourists like Ms. Mao are part of a growing wave of newly affluent Chinese taking advantage of more direct flights to the shopping capitals of Europe. The Lunar New Year holiday is now underway, a time when a big part of the 110 million Chinese expected to travel abroad this year will be packing their bags — and their wallets — for luxury expeditions.
And purveyors of European luxury brands, anticipating the arrival of this important clientele, stand ready to embrace it, whether by offering guided tours, in Mandarin, of flagship showrooms; providing backstage access to couture runway shows; or engaging in a variety of other flourishes tailored for the Chinese tourist-shopper.
Storied European brands like Burberry, Hermès and Dior can be bought in high-end shops and shopping malls of major Chinese cities, of course. But for reasons including higher taxes in China and lower prices in Europe, Chinese consumers, who buy more luxury products than shoppers of any other nationality, prefer to do their buying abroad. Of the more than $80 billion in Chinese purchases of personal luxury goods last year, two-thirds were made outside China.
Flagging demand in China itself was a factor cited last week by the Paris-based LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury goods group, for the company’s flat profit last year. That is all the more reason the company and many of its peers are starting to plow more money into European showcases and shift investments away from the Chinese mainland.
Last year, for example, Louis Vuitton opened a three-store, 10,000-square-foot “townhouse,” complete with spinning glass elevator, atop a Selfridges department store on Oxford Street in London.
“There is a major shift happening now with brands,” said Manelik Sfez, head of marketing for Global Blue, a tax-refund company in Geneva that tracks luxury purchases. “They are starting to reconsider their whole structure and the ways they market themselves.”
In catering to the Chinese shopper, some European makers of luxury goods seek to leverage their brands’ heritage and savoir-faire by conducting tours of their landmark European stores — or even setting up museums in them, as Vuitton has done with its “Espace Culturel” on the Champs-Élysées in Paris. Others organize invitation-only demonstrations of the craftsmanship that goes into the products, which companies and analysts say holds a particular appeal for Chinese visitors.

Gieves & Hawkes, the 240-year-old London tailor, for example, lures Chinese groups away from the bustle of Bond Street to its store at 1 Savile Row, which houses an extensive archive of royal and military regalia dating to the 18th century. The visit, which is translated by a Mandarin-speaking guide, includes a stop in the store’s bespoke workshop, where the company still hand-sews 1,000 suits a year.
“In terms of seeing all the components of a luxury brand, it is very immersive,” said Simon Baker, marketing director for the company, which has more than 100 stores in China. “Our Chinese guests are looking to learn what being dressed by a Savile Row tailor is all about, and why it is more luxurious and prestigious.”
The Italian design house Ermenegildo Zegna works with boutique travel agencies, and hotels favored by affluent Chinese, to offer V.I.P. tickets and backstage passes to its European fashion shows.
Zegna has also followed brands like Louis Vuitton and Burberry, already active on the social media platform Sina Weibo, in creating an official account on the wildly popular mobile messaging service Weixin — known outside China as WeChat . So has Harrods, the London department store, which counts Chinese visitors as its largest foreign customer group.
Such efforts are part of the image burnishing that analysts say is as important in marketing to these visiting consumers as selling individual wares.
A Chinese tourist who returns home with a memorable experience to share can be a powerful ambassador for a brand, said Philip Guarino, co-founder of the consulting firm Emerging Market Luxury Advisors.
“You are dealing with a demographic, not a geography, so you need to think in nongeographic terms,” Mr. Guarino said. “Some brands have 150 store locations in China alone,” he said. “But their cash registers are in Europe and the United States.”
Just how dependent the European luxury sector has become on Chinese visitors became starkly evident late last year. In October, China passed a consumer-protection law prohibiting travel agencies from subsidizing group tours to Europe by including mandatory stops at high-end department stores like Galeries Lafayette in Paris or La Rinascente in Milan.
Beijing considered the practice — whereby mass-market agencies used commissions from retailers to offset deeply discounted package tours — to be misleading. Mr. Sfez, of Global Blue, estimated that before the law changed, such captive buying represented roughly 40 percent of all Chinese luxury purchases in Europe.
The law had a striking effect on Chinese tourists’ luxury spending in the fourth quarter, halving sales growth across the European Union to 9.5 percent compared with growth rates of 20 percent or more in the preceding three quarters of last year.
But analysts do not expect a reversal of the broader trend, because higher prices in China compel so many Chinese to prefer shopping overseas. Luxury handbags, which might sell for $1,000 to $5,000, cost on average nearly a third less in Europe than in mainland China, according to Renaissance Capital, a Russian investment bank. Markups by Western brands are common in China, where foreign companies must navigate a thicket of red tape to do business and pay high rents for premium retailing space.
The price gap is further widened by China’s high taxes on consumers. On top of an import duty of 10 percent, Beijing levies a value-added tax of 17 percent and sales taxes that can range from 5 percent to 20 percent, depending on the item. Some other Chinese cities add taxes as well.
Foreign visitors to the European Union who spend more than 175 euros, or $236, in the same store on the same day, meanwhile, are entitled to a rebate on the value-added tax, which in most member states hovers around 20 percent.
Chinese consumers’ embrace of the Internet and social media platforms like Sina Weibo has also increased access to information about luxury goods abroad, allowing them to comparison shop before they even board a plane. Applications like Weixin let people share their foreign shopping experiences in real time, check prices and send photos as they weigh their purchases — or even take orders on behalf of friends back home.
Digital travel magazines, such as the Shanghai Travelers’ Club, have also their Sina Weibo page and publish a curated content about little known luxury brands, as well as tips on how to purchase a private jet or a private island.
Armed with these digital tools, a growing number of Chinese travelers, particularly younger ones, are forgoing the classic group tours and venturing abroad independently. That trend, with the ban on commission-subsidized tours, is driving more tourists to explore beyond the big European flagship stores in the fanciest districts, analysts said.
It also exposes entrenched legacy brands to intense competition in China from increasingly popular rivals like Bottega Veneta of Italy or Mulberry of Britain.
That means the bigger design and fashion houses will need to be more nimble than ever in adapting to the changing habits of their Chinese clientele, according to Federica Levato, a luxury analyst in Milan at the management consultants Bain & Company.
“If they don’t catch up quickly, they will become less competitive,” Ms. Levato said. “Just as they anticipate fashion trends, they now have to anticipate changes in consumer behavior.”

Source: New York Times

Luxury retailers must re-think their strategies with wealthy Chinese shoppers

A report from the Beijing-based World Luxury Association found that luxury spending in China last month fell to its lowest level in five years. Affluent Chinese spent $830 million on luxury goods in China — half of what they spend last year. The month included the important Chinese New Year holiday, which is critical for Chinese tourism and spending.
The report predicts the Chinese luxury market is slowing from double-digit growth to single-digit growth.
But that doesn’t mean the Chinese weren’t spending. While spending on luxury at home was down, the Chinese spent big on luxury abroad.
They spent $8.5 billion on luxury goods overseas during the month — an 18 percent gain over last year. The report said the Chinese accounted for half of all the global luxury products’ consumption during the period and remain far and away the largest luxury consumers in the world.
Such a huge share of the market may not be sustainable over the longer term, of course. Most luxury experts say Chinese consumers will account for about a third of the global market by 2015.
shanghai-travelers-club-audemars-piguet-ad-chinese-touristsAnd the overseas spending will drive much of that growth. The Chinese are buying more luxury goods overseas primarily because they’re cheaper. The Chinese are also traeling more and they prefer buying luxury brands overseas because there is less likelihood of fakes (presumably they’re buying more on Fifth Avenue and the Champs Elysees than along Manhattan’s knock-off row, on Canal Street.)
Hong Kong, Taiwan and Macau are still the most popular markets for Chinese luxury shoppers but about one in five Chinese consumers are now buying luxury goods in Europe (mainly Paris) – a share that’s doubled over the past two years, according to reports from McKinsey & Co. and KPMG.
A smaller but growing share of Chinese consumers is buying goods in the U.S., including New York and Los Angeles, the reports show. According to the Shanghai Travelers’ Club, the Chinese luxury travel magazine for very affluent Chinese travelers, the average spending in New York City  for affluent Chinese tourists is between $15,000 and $50,000, mostly in jewelry and watches.  “This new generation of affluent Chinese customers has a purchasing behavior that has not been predicted by any traditional economic models, and the retail industry must innovate to attract these customers” said Pierre Gervois, Publisher of the Shanghai Travelers’ Club magazine. He added “Audemars Piguet, for instance, has worked with us to target specifically wealthy Chinese tourists in New York City, that is a smart move”
The high costs of luxury goods in China is due mainly to stiff government taxes, which can range between 20 percent and 70 percent on some luxury goods. A designer bag can cost 40 percent less in Paris, for instance, than in Shanghai. While the government may be considering a reduction in those taxes, a report from McKinsey called “Luxury Without Borders” predicts that the Chinese appetite for luxury abroad will continue.
“The price gap is likely to remain substantial in the next two to three years,” the report said, “and assuming it does, Chinese spending on luxury goods will grow about as fast overseas as it will domestically.”
McKinsey said the migration of Chinese luxury spending makes it even more important for luxury retailers to maintain a consistent image in China and abroad.
Marc-Andre Kamel, a retail and luxury expert at Bain & Co. said luxury companies are also installing special payment systems for Chinese consumers and adding more salespeople who speak Mandarin.
He cautioned, however, that the big flagship luxury stores in Paris and other Western cities need to be careful of the long lines and crowd problems associated with an influx of Chinese tourists.
“They need to be mindful of their other customers, as well,” he said.

Will cuts on luxury goods taxes in China prevent Chinese from shopping abroad?

Last year Chinese tourists bought almost two-thirds of luxury goods sold in Europe as they went on a record spending-spree. But while mainlanders are happy to splurge on foreign soil, what their government needs is for them to open the purse strings at home. Domestic consumption has shrunk to just 36% of gross domestic product and is increasingly the weak link in China’s growth.
One step to redress this spending imbalance is to cut penal mainland taxes on consumption and luxury goods. Analysts say such a move now looks likely.
This could have far-reaching consequences for one of the biggest investment stories of recent years — outbound spending by mainland tourists.
Everyone from retailers in Hong Kong, to London or Seoul could feel the fallout, while foreign luxury brands seeking to expand in China should be buoyed by any duty cut.
Expectations that a move is imminent were fuelled by widely reported comments earlier this month by former deputy commerce minister Wei Jianguo, to expect at least two rounds of reductions on import taxes on consumer and luxury goods. Then, this past weekend Finance Minister Xie Xuren promised to improve China’s consumption tax.
Chinese shoppers in ParisAmong the spending habits likely to catch authorities attention say Credit Suisse is the revelation that Chinese residents spent 300 billion yuan ($47.4 billion) overseas on their bank cards in 2011, up 66.7% on a year earlier, according to data from China UnionPay.
And as well as accounting for 62% of all luxury consumer sales in Europe last year, mainland shoppers spent a whopping $7.2 billion during the recent Lunar Year holiday, up 28.6% on the previous year according to the World Luxury Association.
If you look at existing tax rates in China, it is easy to see why shopping overseas is so popular.
Import duties on general luxury products range from 10%-25%, and can be as high as 35%-60% on luxury cosmetic products and alcohol. Add on value-added tax (17%) and a consumption tax depending on the merchandise and prices on the mainland are penal. According to a survey by the Chinese Ministry of Commerce, prices for luxury goods in China are 45% higher than in Hong Kong, 51% higher than the U.S. and 72% higher than France.
If these taxes were designed to promote social fairness and curb bourgeoisie shopping habits by targeting rich consumers, they appear to be missing the mark — luxury spending at home is just being diverted overseas by globe trotting mainlanders.
Another reason to expect action on taxes is the government’s recent focus on boosting growth through domestic consumption. This past weekend in Beijing Vice Premier Li Keqiang said expanding domestic demand is a “strategic point” for economic development. Another official played up China’s readiness to import, predicting it may soon become the world’s largest importer.
This eagerness to import, however, comes at a time when China just recorded a monthly trade deficit in February of $31.5 billion. With export growth expected to remain relatively weak, this provides another reason for authorities to be less sanguine about yuan leaking abroad through unchecked tourist spending.
Meanwhile, it is also worth considering that for many mainlanders, shopping abroad is not just about getting a tax-free bargain.
China’s capital controls and limited domestic investment options mean luxury shopping often fulfills various secondary needs.
In Macau, for instance, purchasing luxury goods can be a handy way to access hard cash. A typical story is a mainlander shopper can buy an expensive handbag or watch on their credit card, which can then be sold back for something like 90% of the value in cash.
In fact, luxury handbags have almost become a money substitute. Milan Station Holdings Ltd. , a chain of shops that trades second-hand handbags even listed on the Hong Kong stock exchange last year, which gives you an idea how big this business is.
This, as well as a preference by many mainlanders to conceal conspicuous luxury shopping overseas, means old shopping habits could be hard to change.
If we do get a cut in luxury taxes, Credit Suisse, say luxury brands who import their goods into China will benefit such as Prada, Coach, Hugo Boss, LVMH or Tiffany.
The flip side, they add, is that for the retail and tourism industries that have benefitted from outbound Chinese tourists, any reduction in import tariffs will be incrementally negative.
But according to China Elite Focus, a Shanghai-based marketing and research firm specialized into reaching to affluent Chinese outbound tourists, these tax modifications will have small impact on the behavior of Chinese shoppers “Buying abroad luxury goods is first and foremost a sign of social status” said Pierre Gervois, China Elite Focus’ CEO. He added “ The fact that Chinese buyers will pay less their luxury goods if they buy in the U.S. or in Europe is a minor factor compared to the prestige of having bought a Tiffany diamond in New York City or a Louis Vuitton bag in Paris”
On the list of potential casualties is Hong Kong, Macau, South Korea to retailers in Europe. Hong Kong could be particularly vulnerable given 28 million mainland tourists visited last year (four times its population) and its huge concentration of luxury retail brands — Louis Vuitton has seven stores in the city, one more than Paris.

Source: The Wall Street Journal, Article by Craig Stephen

Chinese wealthy consumers’ new trends

Luxury goods marketers in China received some good news last month. After the country’s annual policy planning meeting, Minister of Commerce Chen Deming announced that Beijing would soon reduce tariffs and cut red tape on luxury goods imports. The decisions are in line with other policies that will stimulate domestic consumption and, the government hopes, will chip away at the globally contentious trade surplus that China enjoys.

The Chinese market for luxury products has been booming recently. In 2010, sales across categories such as jewelry, leather goods, and upmarket ready-to-wear clothing rose by 20% to reach $12.4 billion. By 2015, luxury goods sales will touch $27 billion — around 20% of global sales — making China the world’s largest luxury market.

There’s enormous potential in China, but marketers still face stiff challenges. Luxury consumers, although they’re relative newbies, are becoming more discerning and demanding, and marketers will have to change in order to appeal to a more confident and sophisticated Chinese consumer. Here are four insights from a survey of 1,500 luxury consumers we recently conducted:

Quality counts. Better quality is the reason to buy luxury goods, said 50% of the consumers we surveyed — up from 36% in 2008. Quality and craftsmanship are the top two considerations when making purchase decisions about ready-to-wear clothing, leather goods, jewelry, and watches. Smart companies have already realized this. A few months ago, Hermes held an exclusive exhibition in Shanghai, dubbed Leather Forever, which included a live show of Hermes’ bag manufacturing process accompanied by displays of raw materials used. Louis Vuitton stores deploy specialists who educate Chinese shoppers about the company’s heritage and how it crafts leather goods by hand.

The real thing. China is a haven for low-priced knockoffs, but luxury consumers are shunning the fake stuff. Just 12% of consumers said they would purchase fake jewelry, down sharply from the 31% who confessed they would do so two years ago. Some told us they would be embarrassed if someone noticed they were carrying a fake while others said they derived satisfaction from knowing that things they bought had appreciated even if they couldn’t be resold. One lady, for instance, was delighted to see the Chanel handbag she bought in 2008 for RMB 25,900 ($3,700) sell for RMB 30,800 in 2010 ($4,500).

Subtlety is chic. A growing number of buyers are shunning overt displays of wealth in favor of subtle ones. Contrary to popular impression, more than half of China’s luxury shoppers say they want less showy fashion — up from 32% in 2008. In fact, 41%, compared with 45% in Japan and 27% in the U.S., say that showing off luxury goods suggests poor taste. A maker of luxury watches told us that it had shifted from selling only flashy diamond-encrusted watches in China to more classic designs as well.

Service matters. The importance of service has shot up from 17% in 2008 to 30% in 2010. Two out of three consumers said they were disappointed with the indifferent attitudes and poor service of salespeople in China. In addition to training staff to be more courteous and patient, luxury marketers should re-examine how they define roles and compensation. For example, Louis Vuitton doesn’t tie the compensation of in-store specialists to sales, thereby ensuring that they concentrate on their task of communicating the brand’s heritage to shoppers.

Max Magni is the head of McKinsey & Company’s consumer practice in Greater China, and Yuval Atsmon is a partner in the firm’s Shanghai office.

Chinese shoppers are heavily influenced by luxury lifestyle publications

Industry insiders said that China’s buyers of luxury goods are young – and with a lack of taste.

According to research from the Hong Kong Institute of Fashion Buying, China’s consumers of luxury and high fashion are between 20 and 50 years old. In contrast, luxury consumers in Japan are mainly between 40 and 60 years old.

“‘One-off consumption’ and ‘purchasing on a sudden impulse’ are the characteristics of young Chinese fans of luxury fashion,” said Gan Jing, a consultant from the Hong Kong Institute of Fashion Buying.

A survey by McKinsey & Co also showed that Chinese buyers of luxury goods are younger. The survey said some 73 percent of Chinese luxury goods buyers are aged 45 and younger, while that number is 50 percent in the United States.

And youth, sometimes, is associated with ignorance. Helen Wu, editor of an entertainment TV program in Shanghai, said: “Chinese consumers do not have good taste in luxury consumption. They buy things just because a magazine or luxury website told them it is worth buying.”

But this is good news for magazines and websites that promote luxury goods and the elite lifestyle.

Liu Jin, a 30-year-old man who works for a luxury magazine focusing on cars in Shanghai, said people are eager to acquire information about luxury goods.

“We used to send magazines to our potential consumers for free four years ago, but the marketing strategy has changed. We’ve found an increasing number of people are willing to pay for magazines with luxury consumer information,” Liu said.

A news vendor on Fuwai Street in Beijing said that magazines about luxury trends are priced up to 25 yuan ($3.80), while news magazines usually cost 10 yuan.

“But fashion magazines are easier to sell, and I never need to worry about that,” he said. In cyberspace, there are now more than 60 luxury websites operating in China, though there were none a few years ago. Even on Twitter “officially” banned in China (but still widely used by the Chinese elite), young and affluent Chinese shoppers have their own Twitter account @niuyuemag  about luxury shopping trends in New York City!

As young people like online shopping, luxury goods retailers are building more websites to facilitate purchases. In March, Burberry, a luxury British brand, launched its online shopping website for Chinese consumers, media reports said.