Chinese Institutional and Legal Barriers to the Development of a Luxury Industry

Abstract

As almost all of the luxury brands in the Chinese market as of 2015 originated from non-Chinese countries, European ones in particular, it could easily be assumed that luxury consumption in China is mainly influenced by the Westernization of Chinese culture. As a consequence, the government is aiming to preserve a market economy with “Chinese characteristics”, and is trying to contain the phenomenon in order to maintain Chinese cultural norms and values. However, as demonstrated in Chapters 1 and 2, while Chinese shoppers are primarily attracted by luxury brands created and designed outside China, this cannot be seen as originating in a Westernization of China. Westernization of a country usually relates to a situation whereby a culture — the Western one in this case — replaces local culture and reorients it towards the new one in everyday habits, norms, and values. However, the phenomenon of luxury consumption and the increasing desire for luxury goods or a “luxury lifestyle” is embedded in Chinese culture. Furthermore, depending on the consumer segment, some Chinese shoppers choose their luxury brands on the basis of a brand’s prestige level and recognition internationally, rather than its country of origin (COO).