Despite the economic downturn and reduced purchasing power, luxury consumption has increased in Sweden and globally in recent years. This is shown in the Consumption Report 2024, published earlier this year. The report includes an in-depth chapter entitled Luxury consumption - status, sustainability and morality, in which the Chinese market is highlighted. Chinese consumers now account for around a third of global luxury purchases.
Building identity
Emma Björner, PhD in Business Administration, who contributed to the Consumption Report 2024, studies Chinese consumption.
"China's strong economic development has created a large middle class with the resources to consume luxury. People use luxury brands to tell themselves and others something about themselves. It is both identity building for the individual and a way to fit in and show respect in different contexts", she says.
She builds on her research in the book chapter Symbolic consumption of luxury fashion brands in China: Motives, expression and media. The study shows that luxury consumption as a status symbol is less important than it used to be. Chinese people are now choosing goods more to express their identity.
Collectivist culture
Using clothing and accessories to stand out and express individuality has been less common in the past, reflecting China's collectivist culture. This is now changing as young consumers become more individualistic.
"The general perception in China is that it is important to be part of a collective. But now new influences are coming in, and social media, fashion bloggers and celebrities are having a big impact on consumers' attitudes and purchasing decisions."
The study shows that younger consumers are more influenced by their surroundings and consume luxury to boost their self-confidence and impress others, while older consumers are more focused on personal satisfaction and quality of life.
"When you are young, you are more impressionable. When you are older, you are more used to different products and consumption, and you make decisions based on different reasons", she says.
A huge market
Historically, half of all Chinese have been most likely to buy Chinese brands.
"China is a huge market. Western brands operating there need to have a lot of knowledge and a strong presence, otherwise it is almost impossible to compete with Chinese brands," says Emma Björner.
The study also highlights that previous research suggesting that Chinese consumers have limited knowledge of luxury goods may no longer be relevant, but emphasises that the results cannot be generalised to the entire Chinese population.
Moral aspects
The Chinese market is currently undergoing major changes in a number of ways. Recently, luxury brands have seen a decline in sales and there are reports that "luxury shame" is spreading in China. The middle class has started to tighten its purse strings. Emma Björner's research will continue to explore the moral aspects of luxury consumption. There is an inherent paradox when it comes to sustainability and luxury.
"Many luxury companies work actively with sustainability, but downplay it in their communication. There are large target groups that do not want to hear about it because it taints the luxury dream," she says.
