Consumers Consumption Motives of Luxury Fashion Branding in China - Dissertation Example

In the past, luxury products are difficult to access and are considered as prevail age enjoyed by the few. It is regarded as something scarce and often associated with those products or services in the niche market (Nueno and Quelceh, 1998; Aaker, 1997). However, this scenario has changed and luxury goods have become affordable to the consumers, especially those in the middle class, as they have more access to funds ever than before (Hauck and Stanforth, 2007; Abu-Jarad, Yusof, and Nikbin, 2010).

This has been viewed by luxury brands as an opportunity to flourish and expand into the globe. In 2003, the luxury product industry was worth approximately 90 billion US dollars (Vickers and Reand, 2003; Antonides, 1998). The majority of the luxury brands have developed strategies specifically for developing countries like China, Brazil, and India in order to mark their presence worldwide. By expanding business around the world, companies can increase sales and avoid various risks (Ferragamo, 2004; Adler, 2002).

The most obvious one would be that it is always safe to put eggs in different baskets rather than one (Arora, 2005). The global recession has decreased the sales of luxury brands in both mature markets (the US, EU, and Japan, etc) and the developing markets. These companies maintain a larger portfolio for conducting business in different markets (Articleworld, n. d.).It is said that in the 1990s, China was growing considerably in terms of economy and GDP; so many luxury brands launched their products in the Chinese market (Assael, 1998; LVMH, 2007; Ahmed, et al., 2002). Another reason was that China is one of the biggest single market and the most populated country in the world, that revealed strong growth in terms of economy (Zhang and Schavitt, 2003; Atterby, 2010).

Moreover, the Chinese consumers are wealthier than they were before, and they were readily accepting the western culture and showing strong preference towards the luxury brands and products (Frank, 2000; Batra, 2000). A study conducted by IPSOS in the year 2003 revealed that there are more than 10 million customers in China who have the potential to buy luxury products (Batra, and Sinha, 2000; Baugh, and Davis, 1989). It was found that in 2003-2005 the luxury spending of the consumers in China was more than $2 billion.

China showed the highest growth rate in comparison to all the developing countries (China Daily, 2004).