Potential niche markets for luxury fashion goods in China

Purpose - The purpose of this paper is to investigate market segmentation of affluent Chinese consumers and develop profiles of identified segments for potential target markets for luxury fashion goods. Design/methodology/approach - The data are from the 2006 edition of an annual survey called the "China's New Rich Study". The respondents form a representative sample of affluent consumers, 18 to 45 years old, residing in China's 12 largest cities. A psychographic segmentation approach is employed to classify these consumers. Findings - Five distinct market segments of affluent Chinese consumers are identified and profiled. Of these segments, three seem the most promising target markets for luxury fashion goods. Practical implications - When companies understand the similarities and differences between consumer segments as well as the unique characteristics of segments, they have a meaningful basis for selecting receptive target markets and formulating and implementing effective marketing strategies. The findings of this study can be useful not only to companies that offer luxury fashion goods, but also to those targeting the upscale market with a plethora of products and services like yachts, luxury cars, high-end electronics, resort vacations, and credit cards and other financial services. Originality/value - This is the first study on segmentation of Chinese consumers for potential target markets for luxury fashion goods. Results reveal heterogeneity among affluent urban Chinese consumers. Strategies for marketing luxury fashion goods to promising target markets in China are outlined on the basis of segment profiles and culturally based motivations for purchasing such goods.