A New Era of Affordable Luxury

“We live in an age when expensive and inexpensive goods coexist peacefully. This is the first time.” – Karl Lagerfeld
A New Era of Affordable Luxury

As the term implies, affordable luxury means “luxury that you can afford”. Everyone is able to enjoy affordable luxury easily in the increasingly intensive carnival of luxury. Although such people’s consumption capability is nothing like that of splurging billionaires, their affinity with and loyalty to big brands are no less than the rich. They are very happy to purchase small affordable luxuries such as purses, belts, sunglasses and perfumes to decorate their lives.

The significance of luxury as a concept for people today goes without saying. In the midst of diversified social communications, a small luxury as a finishing touch helps enhance confidence. Compared with sports cars and mansions, “small luxuries” seem to be much more “personal”, which reflects the details and features of the “refined” luxury. The significance today of the affordable luxury lifestyle is its contribution in enhancing taste and the sense of self-identity. A real urbanite knows how to gain bonus points with the deployment of affordable luxuries which represent not only an exquisite lifestyle, but also clarify and enhance the enjoyable, personalized and quality details of life.

Karl Lagerfeld, the successor to Coco Chanel, Nie said, “We live in an age when expensive and inexpensive goods coexist peacefully. This is the first time.”

Regarding the consumer concept of luxury, affordable luxury consumption has passed through the “glittering jewelry” phase and now trends towards healthy rationality. The purchase of luxuries is a reflection of a state of mind and taste, and a belief in oneself rather than self-worship.

The Americans phrase for “affordable luxury” is “better brands”. It is defined by items and services which allow enjoyment of luxury standard features without breaking the bank. Such a definition may elicit a smile of understanding. It is a explanation that implies the pursuit of luxuries without excessive consumption.

Many years ago, the key phrase was “petite bourgeoisie”. Literally, this group in society included people yearning for Western ideas and lifestyles and the pursuit of inner experiences, materials and spiritual enjoyment. The term has become less popular now, and it seems that “affordable luxury” has replaced “petite bourgeoisie” as the vogue concept.

What is the difference between the petite bourgeoisie and affordable luxury? The idea of the petite bourgeoisie has an emotional appeal while affordable luxury is material. But affordable luxury is also reminiscent of the petite bourgeoisie in emotional terms. In essence, both of them are the same consumer group. Currently, most affordable luxury consumers in China are gathered in Beijing, Shanghai and Guangdong.

Affordable luxury differs from more standard luxury in terms of more reasonable prices. The reason is that current luxury consumers tend to be younger, and the main consumer groups consist of people born in the 1980s and even the 1990s, people who are living without large savings to back them up or significant economic pressures.

People born in the 1980s and 1990s in Beijing, Shanghai and Guangdong were almost all only children. They no longer shoulder the kind of onerous social and family burdens as their parents. Having endured all the hardships, their parents hold an ineradicable traditional idea of leaving possessions to their descendants, so that they have worked hard to create the basic life paths for their children. Therefore, most people born in the 1980s and 1990s in major cities own accommodation unhampered by loans and even their children are raised with financial support from their parents. Nevertheless, the 1980s and 1990s generations in the middle class ever-growing requirements in terms of high-quality consumption, and they are no longer proud of the “diligent and thrift” lifestyle of their parents. The many social media platforms require them to express themselves and their personalities by showing off the places they have gone, stuff they have purchased and things they have done. Doing so demonstrate not only their personalities, but also their spirit and values.

On the other hand, the second generation of wealthy families learn about the lifestyles of young people in developed countries by studying abroad, which makes them regard the pursuit of excessive luxury regardless of context as being to some extent characterless. They are familiar with luxuries, but the characteristics of the nouveau riche seen in their parents can no longer be observed in them. They are willing to take the path of self-reliance, do what they want to do within the scope of their abilities, be themselves and live and consume intellectually.

Therefore, affordable luxury is a lifestyle with more respect for life qualities. Having nothing to do with wealth or status, it is a symbol of the pursuit of high-quality life detail, and a high-quality lifestyle that the wealthy and the middle class in China currently enjoy. The affordable luxury lifestyle is the recognition of both self-taste and personal value.

 

Affordable luxury in the eyes of the affordable luxury people

What products echo with the concept of “affordable luxury”? The first criterion is price. SpaChina surveyed 30 young people who consider their lifestyles as fitting into the “affordable luxury” category. Their average age is 34 years old and two-thirds of them have children. Taking Spa-related hotels and holiday resorts as an example, the survey results show that in the opinion of those surveyed, acceptable prices of affordable luxury hotels are on average between 1,000 to 1,500 yuan per night with a 60-minute Spa of 500-800 yuan and meals of 150-200 yuan per person. It is best if the hotel is equipped with entertainment facilities for both children and senior people. The best choice is that the hotel is situated in the mountains and beside flowing water, and the distance from major urban centers is within four hours by road or three hours by plane.

More interestingly, SpaChina conducted one-on-one interviews with them, and asked some questions, including reasons for choosing affordable luxury, views on the decline in the main luxury market in recent years, criteria of suitable hotels and holiday resorts for travel or holidays, whether they will visit Spa and the amount of their budgets. Some ideas are shared as follows.

 “In addition to the anti-corruption campaigns and other reasons, the decline in the big traditional luxury market is greatly due to the changing tastes of Chinese people in the last two years,” said Chen Sining, a buyer at an enterprise in Beijing. “For Chinese consumers, brand recognition is not the only factor for choosing products; instead, production combination, innovation, update speed and price positioning are more important criteria. As a result, expensive old luxury brands taking “classic” products as the sales backbone suffer from declining store sales volumes in China. In this case, affordable luxury items with personality and uniqueness rise in the market.” In Chen’s opinion, “This new consumption concept is also reflected in holiday travel. Simple meals and accommodation are less creative. We want to pay for new personalized experiences.”

Fei Yu, department director of a logistics enterprise in Shanghai, said, “The affordable luxury complies with the tendency of luxury consumers to be increasingly younger in China such as 1980s generation people. They have a demand for more personality in what they buy. Now, an increasing number of brands create “affordable luxury” products in order to fit with the consumption concepts of young consumers. For example, Samsung has launched the Galaxy A8, an “affordable luxury” mobile phone with a price of about 1,600 yuan; Skyworth also takes “affordable luxury” as its product positioning when entering the air conditioner market. They all aim at seizing young people’s psychological characteristics and requirements of living a high-standard life without wasting money.”

He Lanhui is a Taobao shop owner living in Shenzhen. In her opinion, affordable luxury supporters possess good taste and an eye for fashion. They will neither be kidnapped by big brands nor forced to live impoverished lives. “Affordable luxury brands in China are faced with a younger and more personalized group with the most active consumers aged between 25 to 40 years old. Consumers in this group also pursue varied affordable luxury objectives. Some consumers have certain economic levels and abilities to appreciate, so they pursue high-grade lives and expressions of their social status; some consumers are young white collar people hoping to reward themselves after busy work; and there are some housewives.” He regarded WeChat Moments as the best exposure approach of the affordable luxury lifestyle. “There is no better way to demonstrate one’s taste than to post affordable luxury experiences in Moments. I like going on holidays with all my family in a characteristic lodging place or a boutique resort with a price of several thousand yuan per night, enjoying some local dishes, and buying some interesting local products.”

 “The backbone must be the middle class. Affordable luxury is believed to be the development trend as more and more people go abroad. LV and other brands are no more rare and surprising and everyone can afford to buy a premium bag for 20,000 yuan. The extra-rich are an exception. We middle class still take a wait-and-see attitude towards top luxury products. We neither want to spend much on a bag nor lose face. The concept of affordable luxury therefore came into being. Just as its name implies, it is about enjoying luxury standard features in a sensible manner,” said Liu Feng, a financial manager in Shanghai. “I think this is an inevitable trend of social development and becomes apparent as people begin to pay attention to the materials and design of products instead of just the luxury product label to represent identity. On the other hand, with economic development as the mainstay, the middle class is also aware that if your capital does not really make luxury products a daily necessity, your clothes and your taste will look strange. Therefore, the concept of affordable luxury is an inevitable result of social development.” When asked if he would choose a Spa resort at 3,000 yuan per night, he said, “Two families together? If together with parents and two children, or AA treatment with friends, the price is okay.”

Zhang Yufan, operator of an export company for the past five years in Beijing, argued that affordable luxury is a life attitude, low-key, comfortable but no less noble and elegant; enjoying luxury standard features without wasting money. Affordable luxury is a rational state of pursuing material comfort without burden and aims to enjoy the beautiful life and express ourselves at the same time as restraining ourselves and being rational with regard to life, not being blind or empty in our choices, more discerning. Affordable luxury does not necessarily mean the most expensive, but it must be the most suitable item with good quality. Obviously, “rational” is the biggest feature of affordable luxury people.

Liu Yuyao, assistant manager of a foreign-funded enterprise in Shanghai, said: “I really like to go to the spa. Every time I go on a business travel or holiday, I will live in a hotel or resort with Spa as a reward for my hard work. I feel better in the five-star hotel Spas since both the service and Spa items are first class. Moreover, now hotel Spa are not much more expensive than city Spa. I have an affinity for hotel Spa because five-star hotel provides a quality environment and a guarantee of service. I hope that hotel Spa prices can be more wallet-friendly, such as exemption of the 15% service fee and the like.” She felt sorry that there is no suitable hotel Spa near her home or office for daily face and body treatment. “If the hotel Spa can develop more suitable programs for the 1980s and 1990s generations, I will buy a card to be a long-term member. Most of the good hotel Spa face and body treatments are designed for 1960s and 1970s generations and do not value our age group.”

 

Affordable luxury in the eyes of insiders

 “I think affordable luxury is a kind of affordable pursuit of quality life and is attractive to everyone. As long as one loves life, he or she will certainly have his or her own life philosophy,” said Ms. Wang Yiren, vice president of Blossom Hill.

Over the past eight years, 19 Blossom Hill hotels and resorts have been opened, based on the concept of the homestay. “Some founders of the Blossom Hill have even operated traditional city commercial hotels. But the hotel industry was already in a lot of trouble in 2009 and all premium hotels were international chain brands, so it was difficult to find any opportunity. Meanwhile economic hotels also completed property acquisitions and begun the M&A shuffle, so there were no development opportunities left. Then we considered to shift to other places and began to look all over the country. Finally we found that Lijiang was underestimated. It’s a place blessed with good weather, fresh air, blue skies and bright sunlight where you can find happiness. Lijiang’s architecture and Naxi culture have been included in the world’s cultural heritage, and the Naxi people have been excellent in cultural heritage and preservation. Lijiang therefore was the first featured Blossom Hill “inn”.

In Ms. Wang’s view, affordable luxury is also reflected in the “freedom” and “trust” endowed on the young group in addition to the wallet-friendly prices. “We focus on mutual trust, sharing and interaction with guests so that they feel more warm and comfortable as at home. For example, all guests are subject to reservation unsecured, deposit-free check-in, free-of-inspection departure.” This makes affordable luxury people really feel that this is their own holiday lifestyle.

 “The development of high-medium hotels is accompanied with the rise in incomes, mainly targeted at the consumer class or the middle class, while the top luxury hotels are committed to the group more extensive and less market-sensitive. The advantage of affordable luxury hotels is to provide a better design and more comfortable and cost-effective living environment that fully meets the needs for personalized products of the middle class,” Ms. Wang Yiren said.  The price of Blossom Hill hotels and resorts ranges from 480 yuan to 1,580 yuan per night.

 “As we all know, not every guest is a Spa potential customer, so the Spa has the guests and local customers as important target group to maximize the benefits,” said Adrian Rudin, general manager of NUO Hotel Beijing. “NUO Spa is full of artistic design in an effort to amaze Beijing local people with a new look in hotel Spas. Artist’s works allow them to ponder on their own aesthetics in an artistic space while relaxing and experiencing the Spa. Examples include Huang Qicheng’s “Finding Pleasure in Hills and Water”, and Wang Gang’s “Rose” that easily resonate and make you feel relaxed spiritually.

Naked Group started when its founder Grant Horsfield traveled to Moganshan village in Deqing County, Zhejiang Province. The naked Village was built with eight holiday houses and 21 guest rooms in 2007 and the naked Stables was completed and put into operation in 2011. The resort employed industry-leading sustainable materials and was awarded with LEED Platinum Certification for its treetop villa and rammed-earth cabins, the first in China to achieve this certification. It has been well received among the affordable luxury group. It boasts a presence of a kikaboni restaurant hidden in a forest, naked taste themed by leisure creative cuisine, naked leaf Spa in isolation, along with diversified activities such as mountain hiking, horseback riding and pottery making. Its occupancy rate is generally 90% and up to 100% on holidays when booking is a must. It is suitable for the whole family, the old or the young, and is great for providing an intimate sense of Nature in a real sense.

Phuket naked Sail Arabella 2015, Moganshan naked Castle June 2017 and the upcoming resorts: Suzhou Taihu naked Water, Suzhou naked Orchard, naked Spring just two hours from Shanghai, Chengdu naked Creek and Chongqing Bishan naked Falls, as well as retail store naked Things and eight naked Hubs, all are aimed at the Chinese middle class pursuing the affordable luxury lifestyle.

 “China is one of the most energetic countries in the world and blazes with innovative and creative ideas. People are thinking about how to change the world and make progress every day,” said Grand Horsfield, founder of naked Group. “The main force that promotes the world must be the middle class.”