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The Behavior of the Chinese Customer in Luxury Purchase Decisions

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The Behavior of the Chinese Customer in Luxury Purchase Decisions Master’s Degree Programme In Languages, Economics and Institutions of Asia and North Africa (D.M.270/2004) Final Thesis The behavior of the Chinese customer in luxury purchase decisions. What drives him to buy abroad? The case of Chanel Supervisor Ch. Prof. Andrea Pontiggia Assistant supervisor Ch. Prof. Adriano Boaretto Graduand Angela Ferrato Matriculation Number 846588 Academic Year 2017/2018 1 2 “Simplicity is the keynote of all true elegance.” Coco Chanel 3 4 INDEX INTRODUCTION ................................................................................................................................. 9 前言 ..................................................................................................................................................... 13 CHAPTER 1: CHINESE CONSUMERS AND WESTERN COMPANIES .................................. 15 1.1 A LITTLE BACKGROUND ....................................................................................................... 15 1.1.1 HOW IS THE CHINESE POPULATION DIVIDED? ........................................................................ 15 1.2 LUXURY ...................................................................................................................................... 17 1.2.1 LUXURY IN CHINA ............................................................................................................................ 18 1.2.2 FEATURES OF LUXURY .................................................................................................................... 20 1.2.3 THE TYPES OF LUXURY ................................................................................................................... 20 1.3 WHO ARE THE MOST IMPORTANT CHINESE LUXURY CONSUMERS? .................... 21 1.4 WHAT ARE THE DIFFERENCES BETWEEN ASIAN AND WESTERN BUYERS?....... 27 1.4.1 SENIOR BUYERS ................................................................................................................................ 28 1.4.2 MILLENNIAL ...................................................................................................................................... 29 1.4.3 GENERATION Z .................................................................................................................................. 29 1.5 WHAT SHOULD WESTERN COMPANIES CREATE? ....................................................... 30 1.5.1 WHICH MISTAKES CAN WESTERN COMPANIES MAKE IN CHINA? ..................................... 31 1.6 CHINESE CONSUMER BEHAVIOR ....................................................................................... 33 1.6.1 MASLOW’S HIERARCHY OF NEEDS: ............................................................................................. 35 1.6.2 HOW MUCH IMPORTANT IS THE BRAND? ................................................................................. 36 1.6.3 PRICE ................................................................................................................................................... 39 1.7 WHY ARE CHINESE CONSTUMER NOT LOYAL? WHY ARE WESTERNERS? .......... 40 1.7.1 HOW MUCH DOES BRAND NATIONALITY INFLUENCE THE DECISIONS? .......................... 41 FRANCE .................................................................................................................................................................... 42 ITALY ......................................................................................................................................................................... 42 GERMANY ................................................................................................................................................................ 43 UNITED KINGDOM............................................................................................................................................... 43 UNITED STATES ................................................................................................................................................... 43 CHAPTER 2: WHY CHINESE CONSUMERS BUY LUXURY PRODUCTS ABROAD? ......... 45 2.1 THE GREY MARKET ................................................................................................................ 45 2.1.1 GREY MARKET GOODS .................................................................................................................... 46 2.1.3 DAIGOU: GREY MARKET IN CHINA............................................................................................... 47 2.2 THE GLOBAL CHINESE CONSUMER ................................................................................... 48 2.2.1 REASONS ............................................................................................................................................. 49 2.3 CHINESE TOURISTS ................................................................................................................ 51 2.3.1 PAYMENT SYSTEM ........................................................................................................................... 55 2.4 TOP DESTINATIONS ............................................................................................................... 56 2.5 E-COMMERCE ............................................................................................................................ 58 2.5.1 THE IMPORTANCE OF THE CHINESE E-COMMERCE ............................................................... 59 2.5.2 COUNTERFEIT GOODS ..................................................................................................................... 60 2.5.2 SHUADAN ............................................................................................................................................ 63 2.5.3 DIFFICULTIES FOR SMALL ENTERPRISES .................................................................................. 63 2.5.4 HOW DOES IT WORK? ...................................................................................................................... 64 2.5.6 WHAT IS DOING THE GOVERNMENT? ......................................................................................... 65 5 2.5.7 RESPONSABILITY OF THE CHINESE GOVERNMENT................................................................66 2.5.9 LITTLE PROGRESS ............................................................................................................................67 2.6 THE BLACK MARKET ............................................................................................................. 70 CHAPTER 3: THE CASE OF CHANEL ......................................................................................... 75 3.1 BRAND IDENTITY ................................................................................................................... 75 3.1.1 STORY OF THE BRAND ....................................................................................................................76 3.1.2 THE LAST YEARS ...............................................................................................................................78 3.2 DESCRIPTION OF THE BRAND ........................................................................................... 80 3.2.1 PERSONALITY ............................................................................................................................................ 80 3.2.2 RELATIONSHIP .......................................................................................................................................... 80 3.2.3 CULTURE ...................................................................................................................................................... 80 3.2.4 REFLECTED ................................................................................................................................................. 80 3.2.5 MENTALITY ................................................................................................................................................. 81 3.3 COMPONENTS OF SUCCESS.................................................................................................. 81 3.3.1 PRODUCTS ................................................................................................................................................... 81 3.3.2 DISTRIBUTION ........................................................................................................................................... 82 3.3.3 PRICE .............................................................................................................................................................. 82 3.3.4 ADVERTISING ............................................................................................................................................. 82 3.4 BRAND WHEEL ........................................................................................................................ 83 3.4.1 RESONANCE .......................................................................................................................................84 3.4.2 JUDGMENT ..........................................................................................................................................85 3.4.3 FEELINGS ............................................................................................................................................85 3.4.4 PERFORMANCE .................................................................................................................................85
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