Excellent post. Do you make anything of the fact that pictures and M&Ms seem more affordable than branded apparel and Rollexes? Maybe now is the time for the more affordable categories? On top of the experiential content.
Yes, for sure, affordability plays a role, but I agree with your point about the general shift. In Shanghai, there are certainly people who can afford luxury items like Rolexes or branded apparel, but the focus has shifted towards experiences—like food, cinema, and travel—often on a budget. I’ve also seen data indicating that while the Chinese are traveling more than before COVID-19, they are spending less on average, and I think this pattern extends to eating as well.
What stands out is the decline in interest from people who can afford these high-end items. It’s not just about affordability; it’s a broader change in consumer priorities and spending habits.
The marginal purchaser of luxury, and especifically aspirational luxury (the affluent middle class) is probably one of the most hit by wealth effects. The rich are probably hit even more but a piece of apparel is not a big deal, whereas the less affluent middle class never accessed those products.
Great post, so interesting to read about day to day stuff what happens inside China. As an Australian we get surprisingly little news about China in the media other than stuff about their military - which while not inaccurate tends to be a little slanted towards the US perspective.
Thank you! Seeing China with your own eyes is invaluable—it gives you insights that are hard to replicate and an invaluable edge in investing. I’ve always said this, and I know it’s not always easy to visit. The reality here is so different from the usual media coverage. I’ve written about this more in-depth here: https://www.greatwallstreet.net/p/is-china-investible?r=3iy5ju
Excellent post. Do you make anything of the fact that pictures and M&Ms seem more affordable than branded apparel and Rollexes? Maybe now is the time for the more affordable categories? On top of the experiential content.
Yes, for sure, affordability plays a role, but I agree with your point about the general shift. In Shanghai, there are certainly people who can afford luxury items like Rolexes or branded apparel, but the focus has shifted towards experiences—like food, cinema, and travel—often on a budget. I’ve also seen data indicating that while the Chinese are traveling more than before COVID-19, they are spending less on average, and I think this pattern extends to eating as well.
What stands out is the decline in interest from people who can afford these high-end items. It’s not just about affordability; it’s a broader change in consumer priorities and spending habits.
The marginal purchaser of luxury, and especifically aspirational luxury (the affluent middle class) is probably one of the most hit by wealth effects. The rich are probably hit even more but a piece of apparel is not a big deal, whereas the less affluent middle class never accessed those products.
Great post, so interesting to read about day to day stuff what happens inside China. As an Australian we get surprisingly little news about China in the media other than stuff about their military - which while not inaccurate tends to be a little slanted towards the US perspective.
Thank you! Seeing China with your own eyes is invaluable—it gives you insights that are hard to replicate and an invaluable edge in investing. I’ve always said this, and I know it’s not always easy to visit. The reality here is so different from the usual media coverage. I’ve written about this more in-depth here: https://www.greatwallstreet.net/p/is-china-investible?r=3iy5ju
Sounds like Rolex salespeople might need a side hustle at Pop Mart to pass the time.