Review: Elite China

Title: Elite China

Luxury Consumer Behavior in China

Author: Pierre Xiao Lu

Personally, I feel the whole emphasis on the Chinese luxury market is a symptom of the Western assumptions of modernity simply projected on to what in reality is a very tiny market segment. Westerners tend to visit and/or live in areas where incomes are exceptionally high. They tend to make friends with Westernized Chinese. They have a habit of continuing their Western lifestyles in China, as if the local simply does not exist. Most importantly, when confronted with the reality of how everyone actually behaves, they tend to label it as backward, just waiting for modernity to take hold.

The whole emphasis, which has become received knowledge in the West, that Chinese place a large emphasis on conspicuous consumption simply puzzles me (I must be hanging out with the wrong crowd). I do not see it. This is not mainstream. So, it was with great skepticism I approached this book. Professor Lu surprised me though. He knows this is a limited market, and he examines it as such. Lu also brings out the contradictions of this market segment--the values that work against such consumption. This book reads a lot like an expanded Ph .D. thesis, so if you are a researcher, you will find the book easy to follow and possibly helpful in your own work. Segmentation of the Chinese luxury market is well done, and the review of luxury consumption theory is good. I have a bit of an issue with a couple segment labels, but overall, this is a good resource. For managers, however, I am not so sure. The most important point I think Lu makes is that brand managers cannot just bring in their existing assumptions. There is also a great point that real and counterfeit goods may make little difference to Chinese consumers--so learn to deal with it. I do not believe managers will get these points though, and would rather pick up on the assertion of how large the luxury consumption market is in China. When we look a bit deeper at Lu's data, I'm not so sure that disposable incomes in just the few hundreds of US dollars actually qualifies for what we think of as luxury.

Doctor Lu does not hide any of these issues. He is up front about these problems, and the errors marketers often make. The strong emphasis on understanding the very large differences in assumptions of what modernity is and how Chinese culture impacts those assumptions is the strong point of this book.