Buying luxury items is a brand-new success story(3)

Luxury desires

Zhu Mingxia, an expert on franchises at the UIBE, said that luxury markets develop in phases: China is still at step one, conspicuous consumption, while the second and third steps are appreciation and enjoyment.

"It's partly because luxury items weren't available in China for a long time," she said. "Also, the 'face' aspect of Asian culture has a lot to do with the boom. It also contributed to the strong desire for brands in Japan, too."

According to the World Luxury Association, Chinese shoppers who buy luxury goods are younger than those in developed nations. Data shows that 45 percent are aged 18 to 34, compared to 37 percent in Japan and just 28 percent in Britain.

"Wealth in China has grown so quickly in the past 30 years," Zhou said. "As a result, the rich are younger and are desperate to prove their social status."

Another factor for the market boom in China is the culture of buying luxury gifts for business associates.

"Foreigners are more rational and buy the things they need," said Ouyang Kun, director of the World Luxury Association's China office. "Yet, the Chinese sometimes buy four or five of the same thing for their family or business partners.

"It is a Chinese characteristic," he added.