 why does it seem like Chinese people love luxury brands the most and are these luxury brands actually fully dependent on the Chinese market moving forward yeah we gotta talk about it because there's some stock news Andrew LVMH stock hit all-time highs due to China reopening in the upper class in the middle class buying up all the ever LVMH products and they're going ham in Tennessee they love the Chinese market Asia market yeah well 43 percent of the global revenue of LVMH comes from Asia and of that 43 percent 80 percent of it comes from China specifically and those trends are extrapolating into the future so long story short Andrew Asia Pacific specifically China is going to become the number one market for all these luxury brands probably 10 20 30 years in the future now of course Andrew the internet exploded because some people view luxury consumption as soft power or consumer power but make sure you like subscribe turn on your notifications Andrew we're about to get into it silly to serious hot pot boys breaking it down yeah the first comment was from offended westerners they do not want Asia and specifically China to become the number one consumer of luxury goods right because what what does that mean that shows something maybe right well I think if Americans or the western world used to be the number one consumer but now Chinese are or Asia is in general what does that mean does that mean China is going to be indeed more powerful and people are living better lives in China I don't know but obviously so it is true that you have to remember that those profits from that profit margin of every bag from like a Hermes bag is still going to go back to Europe right so Europe's still getting rich off this even though like still actually a lot of Chinese factories are still making a lot of the material for these luxury somebody said man China's success is so over hopped in the media for clicks they're just fear mongering us maybe they'll have a chance 500 years in the future they still got that ever grand mortgage crisis and the population crisis that's unavoidable hey I'll tell you this a lot of people in a lot of countries got a lot of crises okay somebody said uh you guys have to understand spending power is completely different over in China due to the cost of some items being much cheaper some items much being uh more expensive basically the structure of everything is completely different of how people can like have purchasing power somebody said uh yeah bless the ability for Chinese to survive on three bowls of rice every day with soy sauce is way different do you think westerners can achieve that yeah you know I eat this all rice every day with no flavor so I can afford this Hermes bag somebody said of course Asia and specifically in China they have some gigantic macro problems but LVMH is probably not lying on their public financial statements that 80% of their Asia sales are coming from China yeah and then this next comment was like well they still want to be American though and I was like okay you know I actually don't think that a lot of Chinese want to become American culturally they want the freedom and the protection of what being American is like yeah essentially a lot of rich Chinese people want American passports yeah but they also like Canada and I'm saying that overall Chinese especially when you're talking about rich Chinese they respect the legacy brands a lot more because the middle class has a lot of Chinese brands like local like domestic brands that maybe the middle class will consume the lower in the middle class yeah but as far as when you get to the upper crust all they want are the luxury European brands that's all that's it for sure maybe want some Japanese streetwear brands as well somebody said uh it's actually uh just called materialism um I think that Asians in a western sense seem materialistic because they just really love luxury brands I guess a lot of Asians Andrew they do have a very high IQ for like brand hierarchy right yeah I mean you know they know how what an iPhone is they know what LV is they they they know there's a whole like spectrum I mean I would say this Asians like valuable things and they actually see the real like I don't want to say real value because real value that can mean different things but they see the value in buying luxury you're saying almost like the asset value well because they hold the value it's almost like in a way buying gold to an extent right you're saying like buying a Rolex just because the the market for that brand has been so established it's not even like supreme where supreme is going to go out of fashion in like 10 years Rolexes will maintain their value like a hardcore asset class like a commodity like silver or gold at this point somebody said uh if you understand life in Asia there's just way less stuff to spend your money on people in America have gun collections yacht collections summer homes in the Hamptons jet skis boats cars a lot of people in Asia they don't even have a garage spot for their car even if they have money so they gotta spend on these small expensive items like Rolexes etc etc Bulgari do you think this person's making a point yeah it is true like a lot of life in Asia Andrew centered around these like mega cities at least in east Asia or really Asia in general really crammed apartments you're just not gonna have jet skis no i mean like and listen even if you're a rich person in like a second or third tier chinese city really what can you buy in that city that's going to be super duper fun other than buy a bunch of moet hennessey at the club pop bottles you got all the luxury goods you're gonna buy lamborghini's that's not lvmh but you know what i mean i guess like rich germans would have like i need my track car for the autobahn but it's like we wouldn't they wouldn't have that in asia right or like maybe legacy rich whites in america would have like ooh you know i'm gonna ride my six horses in the hamptons i just don't think even rich asians have horses well you know chinese they don't really have that high class society in the same way because you know they're still coming out of communism like not that long well all asia even japan to a lesser extent is coming out of insane poverty right yeah they just don't have those you're saying that victorian culture right they're not gonna buy those big wigs maybe in malaysia they're gonna buy those wigs but like you know what i mean like they don't have the wigs they're not gonna buy the wigs no they was just not as much like i don't know horse racing going on equestrian stuff i don't know you know maybe in the colonies a little bit somebody said uh why are we as asians always white worshiping french brands huh why we're just buying supreme we're buying lvmh we're drinking moet and hennessey don't we need to focus more on like asian things uh i mean first of all globally speaking those have been widely accepted as the brand right like 300 years like even japanese who make a lot of great brands themselves they still agree the japanese like oh yeah i do have to acknowledge uh lvmh is a tough brand somebody said uh for example a lot of asians but specifically chinese people they do buy expensive chinese things but they're more like relics and furniture and decorations but just not closed because let's be honest even to a chinese person shanghai tang is not that cool of a brand no listen you walking to a rich chinese person's home they're gonna have some vases some picture frames some very nice like jade sculptures that are worth like tens of thousands of dollars but then they'll have the hermes bags they'll have the jivan chi they'll have the fendi they'll have like you know the drinking hennessey so extra old they might have some expensive buy geo too though but yeah but just not yeah i mean they go buy whatever like they're like you know the fog warren they're so good at the luxury items you know i like the chinese furniture and acupuncture but for the other things uh a lot of other people handle it i think somebody said um china is just at the phase of capitalism where they are still in the esteem phase now these are what like cultural scientists or anthropologists uh they denote different stages of capitalism basically they're saying that china isn't an esteem driven phase whereas if you look at certain places like japan or sweden they are starting to move into more of a nature harmony phase yeah i think that they're trying to be more like happy with their lives solely where in china it's still a lot about flossing because you're like i just make money i just come up i gotta show everybody that i am rich now yeah this is uh driven by a new rich mentality and it literally just has to do with the stages of capitalism that your society is locked in at yeah i think sweden is just people in sweden are just very like happy knowing that their country runs really really well and like i like my volkswagen it's good at volvos oh yeah nobody's poor nobody's homeless well that's why i think it's interesting that chinese investors actually bought vovo because vovo is not is known for being like a quality over branding company that's interesting i didn't even think about that somebody said uh all asians are pretty much status driven but in china in particular you need brands to get you into certain circles and once you get into the certain circles you can actually be protected even politically that is the uh calculus behind having brands in china this was an interesting perspective yeah listen i mean listen the cool thing about america is that a billionaire you wouldn't even know that they're a billionaire by looking at them yeah i think it's been maybe changing a little bit recently but for the most part in america there's a lot of stealth wealth right yeah yeah and also if your old money let's be honest you're a little bit you're classy but you're not like flashy somebody said uh also in other societies there's a lot more other ways that people rank people for example who is more alpha in a physical confrontation that is not even a thought that people have in china with each other it's true in america especially in the streets man it matters who can murk who that's a hilarious point because like when it comes to social capital it's really more materialistic in china because like there's i mean there is some social capital and being tall and buff and like don't and you don't have a lot of money but in america that plays a lot better being tall buff good-looking but maybe yeah i think america is a very mixed country i don't even want to get into it but a lot of people don't understand it's actually like part barbaric part super advanced whereas china they're just trying to be more you know with the unix and the scholars and the dynastic and pure assistance somebody said uh rich chinese are just a small ratio of actual chinese people many chinese people only make 300 a month i'm so sick of everybody's acting like china's so rich and advanced oh it's obviously a comment from a western person by the way what they're saying is partially correct you know the truth is andrew with 1.4 billion people even if one percent are rich and then two percent are kind of rich that's still 42 million consumers with money 42 million is already more than the population of most countries on earth so it's true in some districts in shanghai you're gonna see stuff that's as pretty or even prettier than anything in the us but you're also going to see some people living in a level of poverty in china a lot of people living in a level of poverty in china that is unmatched by anywhere in the us like higher in a way a little bit higher highs but way lower lows i mean it's very difficult to categorize countries of 1.4 billion people right because the variance is insane right um somebody said the margins that these luxury brands make off chinese trying to be aspirational and uplift their own self-confidence are insane man it's crazy the way people sell these brands to people who want to feel rich but might not even be rich dude the markup on luxury brands i don't even know man it could be 10 000 on a product yeah it's crazy um but what they were saying is that these luxury brands are actually selling aspirational feelings emotion and self-confidence no like like someone said earlier it's kind of like potentially if you buy enough it's kind of like your membership into a club you're paying to be seen as part of this class of people and it helps you ping it helps you meet people it doesn't make you a better person it doesn't make you more useful but it does help you ping with and do you agree that that um needing the luxury brands to gain access to a club that seems like more in old world societies maybe like russia or china right now than in america america seems like it doesn't matter as much right now yeah i would agree with that somebody says there's a reason why arnault is the richest man in the world despite inventing nothing at least elon steve jobs and bill gates were geniuses that fundamentally changed our lives day to day whereas arnault just invented status symbols that really have no raw value well they're talking about the arnault family right which is actually like the richest family like in the world right now um do you think this is true because it's true the other people they invented stuff that like people use every day whereas the other one is status no it's true you don't need an lv bag you don't need it there's nothing does it even work better than a regular ten dollar bag i think it is probably more better well put together and the the leather's nicer but sometimes the leather's not even real leather anymore i don't know they're using this like some type of oh weird vinyl composite yeah yeah anyways somebody said man you guys don't understand raw cogs which is cost of good sold versus brand equity but uh what do you think andrew as we've gotten older do you care more about this brand stuff or do you care less i care more about luxury brands only for certain things and like maybe certain items because i still see the value and quality but no obviously we don't collect like a bunch of watches i mean i will say this you know when i was younger andrew and i could only afford forever 21 clothes i still had a real lv wallet and nowadays andrew i can afford better than forever 21 clothes but i actually just use a vault wallet that i got off amazon because of the usability so it you know in your age have become more uh utility based a little bit more is that me moving beyond the esteem phase on this wow david are you thinking real swedish are you becoming swedish in japanese now i don't know maybe i'm on a different place in maslow's iokim needs um let's get to the takeaways andrew why do you think chinese are such a main driver of the arnault family's wealth uh obviously they're not doing it because they want to make this french guy rich it's because they like the products that lv mh of the conglomerate have all bought i mean yeah trust me guys these chinese people are not trying to become french like yeah you know i buy all the french brand but uh i don't even eat french food right they're still eating mala xianguo and all these things right uh no i mean i i think it's because they look at european culture first of all these are brands that are established these they're super high quality they have a super high standard super expensive they hold their value oh the branding like when you walk into tiffany's even though the diamonds and the jewels and the gold are overpriced obviously there's just a whole vibe when you walk into tiffany's right but i will say this i do think chinese understand the value of like which country they want to go to so i think while they want to go shop in paris i think they would like an american passport and a canadian passport or an australian passport right right they would still value those even though they're not like yeah i don't like any like american brand maybe beside nike but like aside from nike i don't care about any american clothing brand right you say they want french clothing an american passport and to eat hot pot who knows man um what do you think about these french european brands still trying to figure out how to market to asia pacific and specifically china since china may in the next 10 20 30 years become their number one target market even more than western countries are they still going through this process because there has been a couple high profile mess ups whether it was dolce and cabana um being racist dior doing the islant gucci picking certain models that had hyper stereotypical features mercedes doing the same thing as well are they trying to be edgy are they trying to show respect but they they just it goes wrong or is it more like d and g where it's just like yo what were your marketing people thinking yeah i think though i think as they continually uh market towards chinese specifically uh it will actually help the soft power of chinese overall globally a little bit because when these brands cater to chinese other people will see that and then they might subconsciously treat asians a little bit differently however i will say the people who are primarily buying luxury brands i don't think that these are always the same people who are hating on asian people right i think those are mostly separate um do you think china will ever grow out of this esteem phase of wanting to stunt on each other in a obvious brand driven way probably not for another i don't know 80 100 years no i don't think so god it's uh listen uh you know what you may want to speed up the stages of capitalism but whatever phase you are in it is a candle that must burn at the slow pace you know and good for us john you know john week uh yeah i think man i mean dude chinese are gonna love material things and status things for for many years do you think that china will ever develop its own uh luxury domestic products like japan did i mean you see it a little bit now with leaning you know the way away 10 shoes they're like 250 uh you see it a little bit with their their phones you know some of the huawei opal phones they're like 2000 they have a couple uh wines that i heard that are really expensive they have some expensive byju i think it'll look different um as far as new cars are yeah i i don't think it won't be it will be necessarily competing in the same lane as ermez and gervanti and all that stuff it's very hard even for an american brand to reach that tier yeah but but they'll have other high tier brands maybe not watches and stuff but you know other brands other brands uh to address the geopolitical comment that we started off with andrew how much does the consumption of luxury goods mean on a unlike a who's win in the world scale i don't know maybe it also means that chinese people are just trying to like get their money into some products and not in like don't keep it in cash you know because obviously there is some instability there you gotta talk about that's why people want foreign passports and stuff yeah i don't know i mean uh what do you think i honestly think that uh it doesn't really mean much i mean i think it's like one of the things of like 20 that means something in terms of like who the luxury brands are catering to but uh i certainly don't think that it means everything yeah i don't know if the american military cares about this stat that china is like well you know china has bought all the luxury goods they're buying all the lvmh that means that their army is strong is it like in john wick andrew who is uh who is the high table catering to in john week is everything john wick who knows man let us know in the comments section below how much does this mean doesn't mean anything doesn't mean nothing at all i'll keep it civil until next time we'll hop up boys we out peace