May 06 2010 

The HNWI and Upper Middle Class : Attraction and Repulsion

Opinion Way and Think Out, two French research institutes, have, both and at the same time, studied the Mainland China people’s relationship with the occidental luxury for several years. Opinion Way, with the help of Chinedge, studied the HNWI and Think Out, the Middle Class. Chinedge and Think Out took on the Upper Middle Class. Chinedge has been working with both institutes and so, had access to both of their studies.

Of course, many similarities appeared : A strong appetence for education as well as a desire to master the knowledge of brands and also how much the social status is linked to the occidental brands. But at the same time, one could point out the formidable tensions which came to light between these two classes, tensions that the brands must take in account if they want to succeed on this market.

The HNWI consider themselves as the social elite and want this status to be acknowledged by their peers. One quite paradoxical answer, in the Opinion  Way study, stresses  acutely this fact in saying that “the advantage of luxury is that it is expensive”. That is to say the main advantage of luxury is that it is not everybody who can afford it. So luxury helps creating a social elite, a member of which I am.

Luxury makes you different from the others… And here are following several remarks concerning some worldwide brands like LV or GUCCI which, as they are worn by the Middle Class, make these HNWI quite uncomfortable regarding their unequalled elite status : It is too common to wear those brands !

On the other hand, the Think Out study about the Upper Middle Class clearly shows that these mentioned brands are precisely “the stuff that dreams are made of ” and all this because they are worn all over the world by the wealthiest social classes and especially  by the Chinese “celebs”.

Running before the wind, the elite looks for some proper brand that will not become available to everybody. But as soon as the elite adopts a brand, the Upper Middle Class gets hold of it so that it soon  becomes more “democratic”, forcing the elite to find another one etc… At this game, only HERMES wins:  This brand succeeds in maintaining scarcity.

So if brands don’t want to become out of fashion, they must, today, clearly differenciate what they offer – their locations, media, events – for each of these two classes.

Special Chinese media, for instance, exist for the HNWI class, like ROBB REPORT, TARGET, NOBLESSE or else BOATING CHINA,POLO… Chinese marketers call them “Direct Mailing” or “Exclusive Media”. As for the Upper Middle Class, VOGUE, HARPER’S BAZAAR, ESQUIRE or MODERN will be chosen, all wide audience magazines that everybody can easily buy in newsstands on the street.

Locations also will be significant : Even if SOUTH BEAUTY and the LAN CLUB belong to the same owner, the first one aims the Upper Middle Class as the last one will only admit the elite.

CRM data basis should also be segmented by the experts so that it would permit to identify more precisely who’s who among the brand customers and  maybe help finding some different conclusions.

If some brands want to deal with the elite of this country, they must equip themselves to do so and find a new system allowing the wealth of offers to coexist with  some kind of scarcity.This is the big challenge issued to the occidental luxury goods in China today.

By Nathalie Omori. Filed under HNWI |

One Comment

  1. by The HNWI and Upper Middle Class : Attraction and Repulsion « Blog Derek CHEN, Sep 21 2010

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