Elite China: Luxury Consumer Behavior in China—BOOK REVIEW.

Pierre Xiao Lu’s look into the luxury market in China is probably the best book on the topic you can buy.But even if you are not trying to break into the Chinese luxury market there is great value in this book—as a tool for understanding urban culture, background of employees, partners, significant others, suppliers, customers and friends.  For just about anyone working in China today, Pierre’s analysis of the Chinese consumer by age, economic status and location is an invaluable tool.His age classifications are:The New Generation; born before ‘45. Witnessed a half-century of incredible change; well educated, in important sociopolitical positions, parents of Transitional generation, about to retire.The Lost Generation; born before ’60. Victims of CCP social upheaval, lost educational opportunities in the 70’s and jobs in SOE’s in the 80’s and 90’s, first/most affect by one child policy too.  Parents to the One Child Generation.The Suffering Generation; born before ’70. First generation to really “see” the world and work with it, also saw the events in T!ananmen Square, conservative, well educated, current source of most of China’s “elite” class and much industry upper management.The Transitional Generation; born before ’80. Grew up in stability, reform, opening up, money.  They are optimistic, well educated, confident and pushing the “New China” forward.The One Child Generation; born before ’90. In or just out of university, internationally oriented but very nationalistic, affluent, trendy, morally relativistic, aspiring professionals.Socio-economic classifications are (adopted from non-Chinese models--After read this, I thought there could be more work done to differentiate Chinese social levels here, but they may be too new and too varying at this point, I don't know.):The Country Club Establishment; small number of established families, accustomed to wealth, work as heads of banks or major firms, are prominent physicians or lawyers and trusties for hospitals and universities.New Wealth; wealthy but not “established” families, successful business executives, conspicuous users of wealth.Achieving Professionals; Yuppies, career oriented, college educated, home is the symbol of achievement, child oriented, conspicuous consumption.Faithful Followers; white collar workers, working for “respectability,” typically avoid faddish or high-styleGeographic classifications are:The North, typified by Beijing.The East, typified by Shanghai.The West, typified by Chengdu.And The South, typified by Guangzhou (Hong Kong, Taiwan and Macao included here).Of less value is his discussion on values.  While the list of values is extensive it is exactly this variety that lessens the effectiveness of the specific values as marketing/business tools.  This is unfortunate as more analysis into the motivations for individual consumers in the luxury (and other) market(s) would be a valuable upgrade.  Far too often the “values” are presented as either historical left-overs with little to no urban contextual analysis or are modern constructs with positive characteristics attributed to the current government and negative characteristics attributed to western culture (the good/bad domestic/western dichotomy is, unfortunately, used through out the entire book).   The list is valuable, if it can be applied to specific demographics in specific situations.  Alone it creates an overly broad template, often contradictory, that could be used for many countries, not just China.Peirre also falls victim to the very common faux pas of talking about (blaming) the mythical “west” as the source of a specific set of values and historical mistreatment of China.  If China, with 90 plus percent of its population being Han Chinese, can be divided into specific geographical market segments, shouldn’t at least the same amount of division (respect, research) be given to all of the countries/cultures/peoples west of Israel since 1000BC?Two other criticisms that I have are what’s included and what’s not.  First, the islands of Taiwan, Hong Kong and Macao were specifically not included in the discussion of Chinese cultural values.  But opinions from citizens of these areas were included in the results.  Either these inclusions skewed the results or the same exclusions skewed the discussion on values.  Since the citizens of these islands have, in general, higher levels of exposure to luxury brands, higher education and higher incomes it strikes me as disingenuous to include them in the results.  But since these peoples have also been exposed to very different and often competing values over the last 100 years, including them in the values discussion would have probably been problematic as well.  Taiwan, it should be noted, is listed as “part of, but not administered by, the Mainland” according to Pierre.  I'm not arguing this now, just pointing out a bias the comes out in more than one area.  Which brings me to the second point.Pierre, like many Chinese authors, is either afraid or unwilling to be critical of the current government in Mainland China and their deleterious affect on market activity.  For example: he talks about the unwillingness in the recent past to be ostentatious as resulting exclusively from traditional values rather than giving even the slightest reference to the political climate that persecuted conspicuous consumption and the climate of fear that limited consumption by anyone with money (or even rich ancestors).In another section of the book he attributes the growing consumption by overseas Chinese travelers to their new self confidence in the mainland (as it goes into space, hosts the 0lympics, etc.) but never mentions the fact that less than 30 years ago there were NO Chinese traveling abroad from Mainland and until this decade there were not significant numbers with any money to speak of.  The attribution of spending patterns on feelings of nationalism when overseas is almost laughable.  National confidence or merely opportunity that almost no Chinese have ever had before?In a similar vein, he notes that the names on the lists of the richest Chinese change every year and attributes that to the large turn over of wealth now in China (which may or may not be true).  But he conveniently forgets the (well publicized) fact that Chinese actively try to get their names OFF these lists for fear of extortion, taxes and other threats to family and wealth.  Further, the discreet purchasing of large luxury items is attributed to a sense of Chinese social humility (buying a Bently is more humble than buying a Rolls, he claims) and has nothing to do with (political) self-preservation, taste, availability or any other variable.Don't get me wrong, It’s a great book—one that I will refer to and read again for the insight into market segments in China.  In addition to it’s great value in marketing, I see this book as being very helpful to foreign team leaders or HR managers or owners/bosses that have a (relatively) diverse group of Chinese employees that they’d like to compensate and gift appropriately.  It also explains much to the lay foreigner that is trying to make sense of the conspicuous consumption on the streets of Chinese cities today.  I read it with specific suppliers and employees in mind and found the research very helpful in understanding motivations and ways to reward/cooporate in the future.