In a recent report, McKinsey classifies Chinese luxury consumers into four broad categories as follows:
1. Core luxury buyers: Affluent households that spend 12 to 20% of their income on luxury goods per year ($20,000 to $60,000).
2. Luxury role models: Young and fashionable, most are self-employed or corporate executives living in Beijing or Shanghai. They buy to indulge themselves and seek to feel unique rather than show off their wealth.
3. Fashion fanatics: Middle class, typically in junior to mid-level positions; includes some housewives. They spend a disproportionate amount of income on luxury, and have a stronger “enjoy now” mindset, willing to buy on credit. They also exert a strong influence on other consumers, sharing their purchases and opinions in social circles and online.
4. Middle-class aspirants: Middle class living in Tier 2/3 cities. They are infrequent buyers of luxury products. Purchasing luxury goods makes them feel successful and fulfills aspirations of belonging in a higher social circle. They are also less knowledgeable about luxury brands and thus are more cautious spenders.
