A Timeless Luxury Experience

Hong Kong is the heart of Asia’s luxury market where brand names flood the aisles of shopping complexes and flagship stores of high-end luxury goods are found on the corners of the main shopping districts. For the affluent, the options for luxury are unlimited.

Mr. S’s prudence is hinted from the start when he asked for anonymity from this discussion. We meet him and his partner at the Hong Kong Country Club, a social club limited to only 2,500 highly sought ordinary members.



Having lived in Hong Kong for over 10 years, Mr. S has seen the movers and shakers come and go. Recession may have hit hard on Hong Kong but it posed no threat to the CFO of a global lingerie brand. His rule of managing finance like “water to the Bedouins” has kept him safe, if not positively affected. Amongst the truly affluent men, finance tips are never shared. Where spoken, it is usually a stage for bravado. “It’s amazing how many fantastic investors you have in the male changing room. Everybody has a story where they made an amazing killing.”

For Mr. S, recession is more indulgence and buying opportunities. A value investor or as he describes himself “bottom fisher (buy low, sell high)” sums up what recessions has meant for him. “I liquidated before the recession. I scan around. Pay more attention to housing, local or overseas. I bought the apartment at ‘Celestial Garden’ in 1998, at the tip of the recession. 70% off of what it was before.” "For a splurge, it would be a vacation. I would choose top-of-the-line hotels but I won’t spend irresponsibly, but certainly big bucks to try to make it almost perfect….It was more splurge this summer than last…again you get more for the buck.”

Much of this quality-seeking behavior is reflected through his beliefs towards luxury. Luxury is an understatement of status but in truth, it is a deeper personal experience with a brand grounded on quality, style and craftsmanship. “I might have 10 pairs of Brogue shoes and the first one I bought was when I started working 23 years ago and I still have them….I will never tell anybody what brand I am wearing but I know it looks good. Somebody who appreciates it will see it.” For him, brand names might not necessarily be luxurious but luxury will have to be a brand name.

Mr. S who comes from a affluent but thrifty family defines high net worth individuals as owning $10 million disposable income. Christan, a newcomer in the high net worth category sees the amount to be a calculation of ‘living comfortably’. “$2 million. I can think of ways to live with that. I can live off interest from it. I have my house and things are done, it’s not like I’m struggling for that. I’ve done the numbers and I can live off that."

This is what sets them apart on how they perceive luxury. As opposed to the timeless classics Mr. S sought after, Christan seeks for the extrinsic value that luxury brings. “I feel better when I dress well. When I’m in a nice tailored outfit or having a nice bag. It’s kind of exclusive.” She still seeks for value and quality but living in Hong Kong has increased this desire for luxury which is equally replaceable. “I have a budget but it’s now just bigger but I am still within it…. I know it’s living in Hong Kong because it’s all around you.”

Insight:
For the affluent, they are careful with how they spend and especially for men, what information is shared. Often, they are alert about the market and in truth, are themselves the bank. With that in mind, recessionary times for the affluent mean increased purchasing power and more indulgence grounded on value. Similarly, when it comes to luxury, they are hunters of both intrinsic and extrinsic values.

Opportunities:
The label will soon become a basic. With fundaments of quality and craftsmanship, luxury goods will have to prove itself as a timeless classic that builds a deeper and more personal experience with the consumer.