Purveyors of luxury goods rarely get dragged into political discourse. That more than suits the retailers, who are much happier selling handbags than offering their views on the political issues of the moment.
But in China conventional wisdom often gets turned on its head – and in this case the luxury retailers have been drawn into the fray, courtesy of the Beijing city government.
That’s because the city authorities have enacted a ban on billboards promoting ‘hedonistic’ lifestyles and the craven worship of ‘foreign goods’. The restrictions will come into force within a fortnight.
According to the city’s website, the campaign is intended to beautify Beijing. But a second objective – the encouragement of a “fair and harmonious environment” – is going to be a much higher priority. And that means images of models, motorboats and the millionaire lifestyle are deemed no longer fit to be in plain view.
Conspicuous consumption has been on the rise in China, fuelled by the rapid growth of a wealthy elite (at the super-rich level there are now 189 US dollar billionaires, according to the Hurun Report).
Just last week, we reported on the record-breaking $1.5 million paid by a Shanxi entrepreneur for a Tibetan Mastiff dog. That’s the sort of headline that embarrasses the Chinese leadership, which has been much keener to promote notions of the more equitable benefits of economic growth (or see our back page’s Photo of the Week: a gold-plated car).
Alternately, of course, you can just pretend it isn’t happening. And while the city of Beijing’s edict won’t close any of the income gap between rich and poor, it will remove a few of the glossier reminders of the increasing chasm between the elite and many of the poorer sections of society (as we also mentioned last week, economist Joseph Stiglitz estimates that just 1% of Chinese control 40% of the country’s wealth).
If the Beijing plan broadens into a wider national campaign, it could prove damaging to the luxury retailers. After all, China’s appetite for their goods has risen an estimated 16 times since 1998 (to around $12 billion annually, according to McKinsey).
How much of an impact will the new restrictions have? Violators will face a token fine of about $4,600 – so it looks like indirect pressure might have to be applied if the ban is to prove effective.
For those brands that are already well known, much of the mystique is already in place. Accordingly, they are less likely to suffer from the loss of billboard presence. For brands newer to Beijing, it could pose more of a problem, although most campaigns are conducted in the print media, TV and online, where no similar restrictions have been announced.
In fact, marketing executives are already wondering how the ban will be managed in practical terms. So far, media reports have offered little insight, beyond the general consensus that terms like “supreme,” “royal,” “luxury” and “high class” will be the first to be targeted by keen-eyed officialdom.
That still dodges the wider question of what exactly will be constituted as hedonistic by the rulemakers. Advertisers will wait to see if a formal set of guidelines emerges, although WiC suspects that this may never happen.
More likely officials will adopt the “I know it when I see it” line favoured by Justice Potter Stewart in his famed 1964 Supreme Court ruling on pornography.
Certainly, some of the category’s most committed customers would claim similar insight. How else to explain the urge to spend a month’s salary on a pair of shoes or an embroidered suitcase…?
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