Research was performed by the Bank of America Merrill Lynch and the findings were quite surprising when it came to the spending of those around the globe. The research found that China is the fastest growing market when it comes to buying goods or services that are aimed at enhancing the appearance of the buyer or is somehow associated with a higher status in the world. This has been termed “vanity capital”. These types of goods include jewelry, make up, cars, and basically anything that a person could do without, but decides they need in order to be considered one of the people to look at in the world.
Research shows that in the past 5 years, the market for these goods has grown by about 15.6% in Greater China, as indicated below.
The vanity market globally earns $3.7 trillion per year
Causes for Vanity Spending
When it comes to the causes of vanity spending, there are many things the researchers blame. Women marrying later in life is one aspect to be considered. However, most look at online shopping and social media for this increase in spending. The reason for this being how easy online shopping is, and how easy it is for a person to get online, see a product, be envious of the product on the model, and then buy it. Given that most people research some products before buying, the online reviews of these products can play a huge role in whether a person buys it or not. In addition, social media broadcasts personal thoughts about so many things, including the products people buy. This can encourage many people to buy the same products.
Global Spending on the Vanity Market
Though Chinese people are making the most purchases for these vanity goods, when it comes to the regions who are selling these products, China is slightly behind the United States.
Why is this? Many of those who purchase these vanity goods are buying these from other regions, especially in Western Europe. In part, this is due to luxury goods being less expensive when compared to China thanks to luxury brands being higher in China. But, it is also due to this lending even more clout to the vanity product. Those who purchase products over in Europe often brag about this fact along when it comes to the good they purchased.
Only 2% of luxury goods are purchased in China
Many of these luxury goods were purchased by those in government positions last year, but this has been reduced slightly as there have been new laws put into place to stop this. However, even with this in place, the Chinese consumer still takes home the award for spending more on vanity products than any other nation.
It is estimated by 2018, the market for these luxury goods will amount to $4.5 trillion globally. This increase is going to have a lot to do with the market in China. As online shopping becomes easier, more brands enter into the online market, and these companies take a stronger stance in the Chinese market, Chinese consumers are going to start to purchase more of these luxury brands.