Conspicuous Consumption

 

After several more interviews and visits to Xidan, I have been able to get a better grasp on what separates the different Xidan shopping malls. The applicable term can be applied to almost all of modern China’s commercial culture: conspicuous consumption. As my interviews and observations have shown me, the difference between shopping and buying products at Joy City, versus the low-end mall across the street is the product, the experience, and the message it sends. As one of my earlier interviewees noted, Chinese people will save up for a long time in order to buy that one item from a foreign store while buying essentials and daily-use goods from the low-end malls.

Conspicuous Consumption Graph

Increasing consumption of luxury goods in China. The Economist

 

A 2011 Harris Interactive Survey of Chinese adults put numbers to this recent trend. According to the survey, 72% of Chinese adults said that “brand name” is important to them when buying clothes. If you think this isn’t special to China, then consider that the same survey showed that nearly the opposite is true in the US where 76% of adults consider “brand name” to be unimportant when buying clothes. One could extrapolate and say that the Chinese market for consumer goods is almost the polar opposite of that in the US. Though that would probably be going to far without further research into the root causes, it is safe to say that the Chinese consumer approaches purchasing very differently than in their American counterpart. One of the root causes for this difference is the above state ‘conspicuous consumption.’

There is an overall trend in China that isn’t just confined to buying clothes, continues to support the trend of increasing conspicuous consumption. A recent NPR report on the release of The Great Gatsby in China drew parallels between Chinese society and the book/movie. One of the comparisons made noted the rate of consumption of luxury goods in China, the spending to excess, and desire to flaunt wealth through various means, including clothing.

NPR: Gatsby-Like Extravagance And Wealth … In Communist China

For the full article Click Here

The above chart also illustrates the phenomenon well.

Similarly, in my previous blog post, I examined the role of the shopping bag in the social space of Joy City and greater Xidan. Returning to that discussion for a moment, one can view the carrying of shopping bags, emblazoned with the names and logos of luxury brands, as another form of conspicuous consumption. The act of carrying the bag exclaims to everyone else, “I am rich enough to buy ‘X brand’!” This conspicuous consumption is from the same origin and consumer thought process that has made China the number 1 market for Audi’s, a luxury car brand, and the same thought process that fuels the night clubs in China’s major cities.

Bringing this back to Xidan. Two major questions that have arisen during the course of my research at Xidan’s malls are as follow:

1) How are the upper tier malls, such as Joy City, able to compete against lower tier malls right next door?

2) Why are many Western clothing companies able to charge higher prices in China than in the US, despite the fact that China has a significantly lower Per Capita GDP and average income. (US Per Capita GDP: $50,700; China Per Capita GDP: $9,300) CIA Factbook

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The Chinese HM homepage. No Chinese-looking models.

These are the questions that I have focused on, and my answer directly relates to conspicuous consumption and the desire of China’s nouveau riche to show their fellow citizens and the world that they are a part of the world. Of course, other factors are also at play. Chinese perception of beauty is also a major influencer, notably in the striking lack of Chinese models in marketing images throughout China, as well as comments from interviewees that directly state that many Chinese believe “westerners are more beautiful than Chinese people.”

Finally, I recently learned an interesting tidbit of information that seemed indicative of Chinese views on Western clothing. The common vernacular word for “fashionable” or “trendy” used by Chinese youth – 洋气 (Yangqi) – directly translates as “foreign style.” This continues to illustrate the belief amongst young people in China that in order to be fashionable and forward thinking, you have to buy western products. This all goes to show the current trends show no sign of stopping, making the contrast between Joy City and other malls, all the more interesting.