China’s Rich Shifting to “Quiet Luxury”

Fewer of China’s rich are flaunting their wealth as the economy faces headwinds, putting the country’s luxury market under pressure, CNBC reports.  There are emerging signs of so-called “luxury shame” and “quiet luxury” in China, in the face of a challenging macroeconomic environment, sluggish GDP growth and weak consumer confidence, according to a recent report by consultancy group Bain and Co.

“Wealthy customers are afraid of being seen as too ostentatious or too showy,” Claudia D’Arpizio, partner partner and global head of fashion and luxury at Bain & Co., told CNBC in a separate interview.

The term “luxury shame” has been around for a while, the report notes.

“We call it luxury shame similarly [to] what happened in the U.S. in 2008-2009,” D’Arpizio said. “Even people that can afford to buy these products have less willingness to do so, [in order] not to be seen as really buying or wearing very expensive products.”

Instead, Chinese consumers are increasingly following another familiar term, “quiet luxury,” which involves buying luxury goods that are “more subtle” and “less visible,” she said.

China is the world’s second-largest economy and home to over 98,000 of the world’s ultra-high-net-worth individuals — those with a net worth of more than $30 million, second only to the United States.

Overall, many Chinese consumers are becoming more sophisticated, said Bain Senior Partner Derek Deng. While they used to be more willing to pay a premium for foreign brands, today, many of them are making purchases based on a product’s quality or the value proposition a brand has to offer, he says.

Click here for more from the CNBC report.