03
Aug
2011

Are luxury products made in China a negative to the Chinese consumer?

This is a question that is often asked and commented upon by many like me in the industry here. It’s a natural question that is driven by the fact that we all consider at least from a distance that luxury goods must be made in the home country of the brand to be real and not fake ‘knock offs’. We also make the assumption because Chinese consumers will go out of their way to buy original products and avoid fakes, even by travelling globally to do so.

Having said this, we all know that many luxury brands produce some or all of their products in China for economic reasons, so the question then arises ‘well if the brands are happy to make in China, why the consumer should worry?’

Perhaps 5 years ago China was known for making product in high volume, but of a low quality. These days quality is very good because the technology available is as good as can be found anywhere on the planet, and the staff have been trained to international standards; hence output is as good as it can be.

So back to the original question as to whether Chinese consumers are really worried that they buy an LV bag that is made in China and not France. The simple answer being no; they are buying the brand and trust the brand to deliver against its promises. The top international brands have spent a massive amount of money not only building stores and expanding across the country, but perhaps more importantly building trust amongst the consumer base.

This major investment is is paying back now, and is supporting these brands whilst in other global locations things are perhaps not as rosy. What we shouldn’t ignore, is that to retain that trust, Chinese consumers require constant care and attention which is why the number of events run by luxury brands in China is incredible, and naturally the marketing budget reflects this.

So in summary, the Chinese luxury consumer on the whole has no issue with products being made in China. It actually shows a respect by the brands for China and the Chinese in the form of trust, which subconsciously must be rewarding. What perhaps may be an issue at some time in the future is the price of luxury goods made in China as opposed to those made elsewhere; there is little or no difference, so the margins must be good?

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