significance for the luxury and prestige goods sector. The Japanese also have
a special affinity for luxury goods. Japan also accounts for a quarter of the
world’s luxury-goods consumption, and therefore the state of the Japanese
economy and currency value is crucial to the annual performance of luxury
goods companies.
Japanese luxury consumers are highly fashionable. They are also more
label-conscious and brand loyal than their European counterparts. The level
of the Japanese luxury consumer loyalty to several brands such as Louis
Vuitton and Chanel is so high that books have been written about it.
According to statistics from stock market analysis company, Seeking Alpha,
94 per cent of Tokyo women in their 20’s own a Louis Vuitton product; 92
per cent a Gucci product; 58 per cent a Prada product; 52 per cent a Chanel
product; and 44 per cent a Dior product. Although Japanese consumers are
sophisticated, they also value simplicity, high quality, well-crafted goods and
distinctive packaging. These qualities are found among the identified
European luxury brands, which Japanese consumers have a special penchant
for.
The Japanese consumer demographic is also an important luxury market
factor. More than 40 per cent of the population, representing 50 million
people, are over the age of 50. They also control much of Japan’s wealth.
These consumers are more willing and able to spend freely on luxury goods
and services. Japan also has another interesting consumer group, known
locally as the ‘parasite singles’. This group is made up of 5 million young,
single working women who mostly live at home. Their high disposable
income makes them a major force in the consumer economy. They are the
single largest spending segment in Japan, and their expenditure on luxury
goods is up to 10 per cent of their annual earnings. They also play an influ-
ential role in their parent’s buying decisions.
China’s might China is the largest emerging luxury goods market in the
world and is also establishing itself as a superpower of the world’s economy.
The country currently represents 12 per cent of global luxury goods
purchases and is forecast to grow 26 per cent per anum for the next four
years. There are currently 300,000 millionaires in China, who make up a part
of the Chinese luxury consumer population. Within the next five years, the
number of people who can afford luxury goods is expected to reach 1.3
billion. This means that the Chinese consumer is important for luxury brands
because of the potential that this market will have to make or break the
luxury goods sector.
China has seen one of the most dramatic explosions of wealth creation in
human history, notably from 1978 to date. Twenty years ago, there was no
middle class in China but currently, the middle-class population is more than
100 million. Every aspect of the Chinese economy is witnessing a boom. For
example, the year-on-year growth of China’s economy in the first quarter of
chapter 3 73the luxury fashion consumer