CONSUMERS

Why Beijing’s Anti-Luxury Advertising Campaign Won’t Help The Wealth Gap

by

Avery Booker

|

This is the featured image caption
Credit: This is the featured image credit

Avery Booker of Jing Daily navigates the new advertising laws in Beijing, prohibiting outdoor advertisements that “promote hedonistic or high-end lifestyles

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

Avery Booker of Jing Daily navigates the new advertising laws in Beijing, prohibiting outdoor advertisements that “promote hedonistic or high-end lifestyles

Recently, the Chinese government announced a new law that, when put in effect next month, will prohibit outdoor advertisements that “promote hedonistic or high-end lifestyles” in Beijing — essentially code for luxury brand ads. This, as the AP notes, is Beijing’s latest scheme to “ease public concerns about the country’s widening wealth gap.” However, it’s not the only one.

As Jing Daily has previously pointed out, in an attempt to curtail the country’s overseas shopping binge, Beijing has stepped up enforcement of its customs “Rule 54,” which imposes stiff retroactive taxes on luxury purchases, and has stood firm in its support of a high luxury tax, despite entreaties from high-profile individuals to drop it.

“ only 16.6% of consumers considered outdoor print ads a key source for brand education ”

From the AP’s coverage of the new anti-advertising plan:

The Beijing Administration for Industry and Commerce said in a recent statement that businesses were given an April 15 deadline to rectify such ads, along with any that excessively promote “foreign” things.

It gave no details on which “foreign” things were deemed objectionable.

Such promotions help create a politically “unhealthy” climate, it said.

Violators could face fines of up to 30,000 yuan ($4,600), the state-run China Daily said Monday.

Newly forbidden words include “supreme”, “royal”, “luxury” or “high class”, which are widely used in Chinese promotions for houses, vehicles and wines, it said.

Whether this new policy will do anything to narrow the wealth gap in Beijing is highly unlikely. As Chinese shoppers have shown, outdoor advertising is only one way they learn about high-end brands, with the majority of sales driven by word-of-mouth and print media. According to Ruder-Finn’s 2009 Luxury Luxury Forecast, only 16.6 percent of consumers considered outdoor print ads a key source for brand education, compared to 74.9 percent for print media articles and 65.9 percent for advertorials.

“ whether this new policy will do anything to narrow the wealth gap in Beijing is highly unlikely ”

And this is increasingly true for online media as well — the domain of the younger Chinese consumers who are making up an increasing percentage of the luxury shopper base. As L2 founder Scott Galloway, remarking on the findings of last year’s L2 Luxury Lab Digital IQ Index, said,

China has 384 million internet users, more than the U.S. and Japan combined, and 80 percent of Chinese luxury consumers are under 45. In addition, in 3 years the number of internet users in China will explode to over 800 million.

Tapping into the enormous online market in China could define success or failure in the prestige industry over the next decade.

So, considering outdoor advertising is low on the totem pole in terms of driving consumer buying habits, and younger Chinese are too busy looking at online ads and reading online articles to care what’s being advertised on the nearest bus stop, Beijing’s latest measures seem to be little more than lip service. Much like the country’s luxury tax, which has done nothing to slow the rate of luxury consumption, this prohibition on outdoor advertising is unlikely to achieve its stated goal.

Avery Booker
Avery Booker

Partner

With a decade of experience working in the Greater China market, specializing in luxury branding, new media, and trend forecasting, Avery Booker has closely watched and chronicled the emergence of the global Chinese luxury consumer on the world stage.

CONSUMERS

Why Beijing’s Anti-Luxury Advertising Campaign Won’t Help The Wealth Gap

by

Avery Booker

|

This is the featured image caption
Credit : This is the featured image credit

Avery Booker of Jing Daily navigates the new advertising laws in Beijing, prohibiting outdoor advertisements that “promote hedonistic or high-end lifestyles

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

Avery Booker of Jing Daily navigates the new advertising laws in Beijing, prohibiting outdoor advertisements that “promote hedonistic or high-end lifestyles

Recently, the Chinese government announced a new law that, when put in effect next month, will prohibit outdoor advertisements that “promote hedonistic or high-end lifestyles” in Beijing — essentially code for luxury brand ads. This, as the AP notes, is Beijing’s latest scheme to “ease public concerns about the country’s widening wealth gap.” However, it’s not the only one.

As Jing Daily has previously pointed out, in an attempt to curtail the country’s overseas shopping binge, Beijing has stepped up enforcement of its customs “Rule 54,” which imposes stiff retroactive taxes on luxury purchases, and has stood firm in its support of a high luxury tax, despite entreaties from high-profile individuals to drop it.

“ only 16.6% of consumers considered outdoor print ads a key source for brand education ”

From the AP’s coverage of the new anti-advertising plan:

The Beijing Administration for Industry and Commerce said in a recent statement that businesses were given an April 15 deadline to rectify such ads, along with any that excessively promote “foreign” things.

It gave no details on which “foreign” things were deemed objectionable.

Such promotions help create a politically “unhealthy” climate, it said.

Violators could face fines of up to 30,000 yuan ($4,600), the state-run China Daily said Monday.

Newly forbidden words include “supreme”, “royal”, “luxury” or “high class”, which are widely used in Chinese promotions for houses, vehicles and wines, it said.

Whether this new policy will do anything to narrow the wealth gap in Beijing is highly unlikely. As Chinese shoppers have shown, outdoor advertising is only one way they learn about high-end brands, with the majority of sales driven by word-of-mouth and print media. According to Ruder-Finn’s 2009 Luxury Luxury Forecast, only 16.6 percent of consumers considered outdoor print ads a key source for brand education, compared to 74.9 percent for print media articles and 65.9 percent for advertorials.

“ whether this new policy will do anything to narrow the wealth gap in Beijing is highly unlikely ”

And this is increasingly true for online media as well — the domain of the younger Chinese consumers who are making up an increasing percentage of the luxury shopper base. As L2 founder Scott Galloway, remarking on the findings of last year’s L2 Luxury Lab Digital IQ Index, said,

China has 384 million internet users, more than the U.S. and Japan combined, and 80 percent of Chinese luxury consumers are under 45. In addition, in 3 years the number of internet users in China will explode to over 800 million.

Tapping into the enormous online market in China could define success or failure in the prestige industry over the next decade.

So, considering outdoor advertising is low on the totem pole in terms of driving consumer buying habits, and younger Chinese are too busy looking at online ads and reading online articles to care what’s being advertised on the nearest bus stop, Beijing’s latest measures seem to be little more than lip service. Much like the country’s luxury tax, which has done nothing to slow the rate of luxury consumption, this prohibition on outdoor advertising is unlikely to achieve its stated goal.

Avery Booker
Avery Booker

Partner

With a decade of experience working in the Greater China market, specializing in luxury branding, new media, and trend forecasting, Avery Booker has closely watched and chronicled the emergence of the global Chinese luxury consumer on the world stage.

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