The stereotype of the newly minted millionaire draped in labels persists in Asia. But from Northern China to the tropics, the top tier of high-net-worth individuals is beginning to shun conspicuous consumption for brands that make them appear more tasteful and discerning.
From 2007 to 2011, many luxury goods brands in China—still Asia’s most important market for luxury and now the world’s second largest economy—saw double-digit annual growth. But in a highly saturated market the golden era has lost its shine. In the first quarter of 2013, imports of Swiss watches fell 24 per cent year-on-year; in the same year, the average spending of China’s high-net-worth individuals decreased by 15 per cent; as a result, stalwart luxury brands are closing stores or curbing expansion.
But it is not all bad news. In their place is rising the luxury ‘stealth wealth’ brand. Italian leather goods company Bottega Veneta and fashion house Loro Piana—neither widely known in much of Asia until recently—are now thriving. For the super rich, niche brands, exclusive products and unusual experiences have become the new form of self-expression.
“The ubiquity of luxury brands is causing high-net-worth individuals to seek the ever more different, discreet, refined and bespoke products, services and experiences,” explains Jeffrey McCall, Asia managing director of Latitude Agency. “Many already possess the more visible expressions of ‘luxury’—homes, cars, yachts, jewellery, clothing—and now look to acquire luxury that is more personal and often less outwardly visible: art, consumables like wine, even lingerie.”
Typically, these individuals are second-generation wealthy and often educated abroad. They have confidence and security in their status. In research conducted by BBH in Singapore, a high-end luxury consumer noted: “I used to own lots of branded goods, but I am far less bothered now. I feel it’s almost out of fashion. You grow to be more confident and therefore you have less need to use brands to shape others’ opinions.”