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China has become the third largest consumer for luxury products behind the US and Japan, boasting 12 percent of annual global sales at over US$2 billion, said south China's Guangzhou Daily in a report published on June 26.

Statistics show that in April of this year, sales on luxury products including watches, imported jewelry, and top-brand cosmetics and garments in the Guangzhou Friendship Store have increased 34 percent compared with the same period last year.

Statistics provided by Guangzhou La Perle Plaza also indicated an overall increase in consumption of luxury products. According to Wang Yan, the executive board director of La Perle, consumers need to spend 25,000 yuan (US$3,283) in a single day or 50,000 yuan within half year in order to qualify for VIP membership.

During the first two weeks of May alone, they added hundreds of new VIP members. The top spender has shelled out hundreds of thousands of yuan per day buying luxury brands like Hermes, LV, Prada, Ermenegildo Zegna, and Dior.

Guangzhou Daily also gave a portrait of luxury consumers during their interviews. Mr. Wu, a businessman engaged in the real estate industry, thinks brands help shape a person's identity. "I would never dress casually to talk about business with others. Those top brands not only provide good quality but also give me more confidence," he said while opening a closet in his office filled with name brand belts and bags.

According to Wang Yan, many consumers are willing to wait from three months up to one year for specially tailored products provided by top brands like Hermes and LV.

Mr. Xie, involved in the transportation business, is a watch maniac focused on new watches and limited editions. He has even set up a special room to display luxury watches he bought like Vacheron Constantin, Audemars Piguet, and Rolex. 36-year-old Li, who runs a restaurant, has collected over 40 top brand cars.

Miss Ye, with a monthly salary of 5,000 yuan (US$656), is also a big fan of luxury products. She constantly overdraws her credit cards in order to satisfy her desire for brands like LV, Burberry, and Chanel. "The desire to own luxury products is like opium, once you start, you can never go back to the ordinary," said Ye, who has to tighten her other spending.

A survey conducted by Price Waterhouse Coopers indicates that, in contrast to the rest of global consumers, most Chinese who buy luxury products are under 40; in developed countries, people aged from 40 to 70 have dominated the luxury market.

According to Guangzhou Daily's research, consumers of luxury products fall into two categories: affluent people who have enough money for luxury spending, and overdrawn white-collar workers with a monthly income of several thousand yuan. This second group has become the main consumer for luxury products. Although they don't have strong purchasing ability, they spend their money on the comparatively cheaper products of luxury brands. They usually buy luxury goods when there is a discount, and are mainly interested in accessories, such as belts, bags, and cosmetics.

Beijing and Shanghai are the top choices for international name brands when they enter into China's market. According to Jiang Runfu, a manager from the Guangzhou Friendship Store, the consumption ability of Guangzhou citizens is no less than those in Beijing and Shanghai; however, because the city is adjacent to Hong Kong, people often choose to shop there, dividing the luxury products market of Guangzhou.

(China.org.cn by Wang Qian, June 29, 2007)