Know-How Exchange : Student Questions

Dear Cyljulia,

An installment plan for luxury goods? Hmm. In most western countries, installment plans mostly apply to larger purchases,
such as cars and houses, but they're less common for luxury handbags, perfumes, and jewelry.

I'm not saying such plans don't happen, it's just that I'm not aware of them for higher price items.

However, for lower ticket but still expensive items the genuine article is generally a lower cost item than a car (although, not always), but still out of the price range of all but the higher rich
or super or sub super wealthy.

The price per item and greater scarcity thereby gives (or implies) greater exclusivity.

Perception here plays a huge part in the owning of the item, and the amount one pays for it up front, because one can afford it, says lots to other people about one's disposable wealth.

Or it used to.

There's thinking to suggest that as baby boomers age, that there will be less money spent on luxury goods because younger people have differing attitudes toward "stuff" and measures of wealth.

How long it will take this wave of perception to reach mainland China (and much of the rest of SouthEast Asia) is anyone's guess.
Knock offs are big here too, but there are still people who want the real deal and who are willing to pay for it, and often, all up front.

Why? Because they can. Does this make their action right? No, of course not. But perception plays a huge role in the buying process and in the fulfillment of the social and personal need.

How does this work in China?

I hope this opinion helps.

Gary Bloomer
Wilmington, DE, USA