Why are China's elites going for "quiet luxury"?

Summary

The transcript discusses the shift in China's luxury market towards 'quiet luxury,' where subtle sophistication is favored over ostentatious displays of wealth. It highlights the influence of Gen Z and millennials, who value heritage and education alongside luxury collecting. The conversation includes insights from Sara Mao on the significance of family heirlooms and the investment potential of luxury items as an asset class, exemplified by record-breaking auction sales at Christie's.

Takeaways

• 🌏 Quiet luxury is becoming the new trend among China's elite, with a preference for subtle sophistication over ostentatious displays of wealth.
• 🔍 The term 'quiet luxury' has seen a significant increase in popularity, with a 300% spike in Google searches and massive views on TikTok.
• 🛍️ Bain & Co's research indicates that Chinese consumers are expected to account for 40% of the global luxury market by 2030.
• 👗 In China, the saying '先敬罗衣后敬人' reflects a cultural emphasis on respecting appearances and clothing before the individual.
• 🔑 To embody quiet luxury, one should avoid logo-heavy items and opt for understated elegance, reflecting a more sophisticated style.
• 🏛 Understanding Chinese luxury requires knowledge of '老钱风' (old money style), '新钱风' (new money style), and '土豪' (nouveau riche known for flamboyant spending).
• 🚫 The Chinese government has been discouraging ostentatious wealth displays, with actions such as removing 'luxury' and 'high class' from billboards and censoring accounts on Douyin.
• 💼 Chinese firms are advising employees to curb flashy lifestyles in line with the government's anti-corruption measures and efforts to reduce the wealth gap.
• 🏆 China leads the Hurun Global Rich List with 969 billionaires in 2023, surpassing the US, which has 691 billionaires.
• 💼 Gen Z and millennials in China are reshaping the luxury landscape, showing interest in collecting and showcasing their heritage and taste in luxury items.
• 👜 High-end luxury items, such as a Birkin bag sold for HK$4 million, are not just purchased for aesthetics but also seen as alternative assets for diversifying investment portfolios.

Q & A

What is the emerging trend in luxury consumption among China's elite?

The emerging trend is 'quiet luxury' or 'stealth wealth', which emphasizes subtle sophistication and understated elegance over loud, logo-heavy displays of wealth.

How has the popularity of the term 'quiet luxury' grown in recent times?

The term has skyrocketed in popularity since April last year, with a 300% increase in Google searches and accumulating over 35 billion views on TikTok.

What does the Chinese saying '先敬罗衣后敬人' imply about the perception of wealth and status?

It implies that respect is often given first to the appearance and the clothes one wears, which can be associated with wealth and status, before the person themselves.

According to Bain & Co's research, what is the projected percentage of luxury consumers that will be Chinese by 2030?

Bain & Co's research predicts that Chinese shoppers will make up 40% of all luxury consumers by 2030.

What are the three key terms to understand the concept of style and wealth in China mentioned in the script?

The three key terms are '老钱风' (old money style), '新钱风' (new money style), and '土豪' (nouveau riche known for conspicuous consumption).

How has the Chinese government's stance on displays of wealth influenced the luxury market?

The Chinese government has been discouraging flashy displays of wealth for over a decade, which has led to a shift towards understated luxury and the removal of terms like 'luxury' and 'high class' from public advertisements.

What is the significance of the Birkin bag that was sold for HK$4 million at a Christie's auction?

The Birkin bag sold for HK$4 million holds the auction record for the most expensive handbag ever sold, reflecting the high value and desirability of certain luxury items.

What are some examples of luxury items that have recently achieved record sales at Christie's auctions?

Examples include a Cartier Tutti Frutti necklace sold for US$8.7 million, a 1953 Patek Philippe watch for US$8.4 million, and a Château Mouton Rothschild wine from 1945 for US$210,000.

Why are high-end luxury items considered as an alternative asset class by collectors?

Collectors see luxury items as an alternative asset class because they offer diversification in their investment portfolios and can serve as tangible assets of enjoyment with potential for appreciation over time.

What role do family heirlooms play in the luxury market, and how are they perceived by collectors?

Family heirlooms are seen as timeless and often more recession-proof compared to other art forms. They carry historical weight and stories, adding significant value when passed down through generations.

How does the trend of quiet luxury reflect the current social and economic climate in China?

The trend reflects the government's efforts to discourage ostentatious wealth displays, combat corruption, and narrow the wealth gap, while also showing a shift towards more sophisticated and understated expressions of wealth.