The affordable luxury market will be a rapidly growing sector in China. According to the McKinsey’s report, ‘Winning the battle of China’s new middle class’, the middle class* has accounted for 68% of urban households, and the upper middle class** accounted for 20.5% in 2012. It estimates that by 2020, this proportion will reach 75% and 45%.

Affected by their own economic situation, the middle or upper middle-class may save a month’s salary or more to buy a luxury item to reward themselves, but they will never buy a large number of luxury items. More often, they will choose cheaper and more cost-effective brands, however mass market brands or fast fashion brands cannot meet their requirements of design and quality, and affordable luxury becomes their best choice. …

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