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From ostentation to ‘quiet luxury’: the ideological crackdown on excessive consumerism in China

Why China is no longer consuming as it used to | 3. The Chinese government is cracking down on the ostentatious display of wealth, encouraging more discreet and collective consumption, and forcing Western brands to rethink their strategies and communications

 (Adobe Stock)

4' min read

Translated by AI
Versione italiana

4' min read

Translated by AI
Versione italiana

One of the most striking contradictions for anyone who has lived in China – or at least knows its market well – is the realisation of just how consumerist the Chinese are, in a country that, in principle, ought to be deeply communist. This excessive, conspicuous and ostentatious consumption has made China the world’s second-largest economy and, to this day, a land of opportunity for Western brands. Yet something is changing.

In this mini-series, we seek to explain the current slowdown in consumption in China by examining four sociological shifts currently taking place in the country. But unlike the two previous factors – grassroots movements (the generational fatigue and renunciation of the Lying Flat, and the rediscovery of consumer nationalism, the Guochao), there is a third variable that does not stem from consumer choices, but is imposed from above: the political and ideological pressure exerted by the Chinese Communist Party against consumption patterns deemed ‘aberrant’, a sort of attempt at the moral re-education of society orchestrated by Beijing.

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The rise of Chinese consumerism was set in motion four decades ago by a famous quote from Deng Xiaoping: ‘Let some people get rich first’ – a principle that paved the way for the rush towards capitalism, justifying ostentation and unfiltered materialism which has produced the excesses that are plain for all to see.

However, with the advent of the Xi Jinping era in 2012/2013, the narrative was turned on its head. The new ideological imperative is now called ‘Shared Prosperity’, the practical implication of which for the middle class is crystal clear: ‘If we have allowed some to get rich first, we must now all become rich in a fairer way’. The flaunting of wealth is therefore officially branded not only as aesthetically and morally reprehensible, but even as a factor in social destabilisation. The Party has set its sights on so-called ‘aberrant consumption’ and the cult of wealth: suddenly, buying and flaunting ultra-luxury goods is no longer seen as a symbol of personal success, but as a lack of respect for the community and, most importantly, as a sign of non-alignment with the country’s political line.

And digital censorship, which until now had focused exclusively on purging social media and online conversations of politically sensitive topics (the three Ts: Tibet, Tiananmen, Taiwan), now regularly steps in to block and ban influencers and wealthy young people from social media platforms such as Douyin and Xiaohongshu when they show off supercars, watch collections or eye-watering receipts.

But above all, as is always the case in China, self-censorship plays the lion’s share. A phenomenon has emerged – something unthinkable in China until a few years ago – known as ‘quiet luxury’, where executives of state-owned enterprises, civil servants and the business elite practise self-censorship on social media, as any visible purchase becomes a potential reputational, tax or career risk. And this has wiped out what once represented a significant share of Western luxury in China: the practice of corporate gifting (business gifts in institutional relationships), forcing brands to rely exclusively on private demand from end customers.

What does this mean for Western management?

For the top management of European companies, this tightening of the rules calls for a thorough review of their communication strategies. In particular, this means:

 1. Rethinking the positioning and narrative of one’s brands: the days when a product could be sold by capitalising on the concept of ‘social superiority’ or membership of an exclusive elite are over. Today, luxury must be conveyed in China through art, savoir-faire and cultural heritage.

 2. Redefining the product’s aesthetic standards: products without visible logos, which focus on the intrinsic quality of the materials and the understated nature of ‘quiet luxury’, reassure customers who wish to continue consuming without drawing attention to themselves.

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 3. Greater cultural awareness and reputational risk management: local marketing campaigns must now undergo rigorous cultural due diligence, which can only be carried out by local management. Promoting lifestyles perceived as blatantly elitist or at odds with the values of Shared Prosperity exposes the brand to the immediate risk of boycotts or administrative sanctions.

However, this does not mean that consumption will come to a standstill: the Chinese market remains enormous, with vast pockets of an emerging middle class – and therefore potential consumers.

And, to avoid any misunderstanding, it would be a mistake to think that the Chinese government wishes to stifle domestic consumption; on the contrary, boosting domestic demand remains a key strategy for sustaining GDP.

What is important for us Western managers is to recognise how the country continues to evolve: operating in the Chinese market today means accepting that Beijing’s economic policy and ideological sensibilities have become marketing variables in their own right, and therefore knowing how to adapt once again to the constant changes taking place in China.

*Partner at FA Hong Kong Consulting

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