China

Call it a reaction to years of austerity, but China is the world's third largest consumer of luxury goods, accounting for 12% of global sales, according to a December 2004 Goldman Sachs report. If this trend continues, China could surpass the U.S. to become, along with Japan, the world's largest purchaser of luxury items by 2015. Chinese yuppies are driving the demand, buying everything from expensive watches to imported cars. And luxury purveyors are responding: Armani plans to open 24 stores in China in 2008.

Most often mentioned luxury brands:

In this society of sudden economic freedom, newly rich capitalists are eager to clarify their social standing, so they turn to the obvious luxury must-haves: traditional French labels and expensive watches. That explains why Chanel, Lacoste and Dior rank in the top five brands with the highest level of recognition.

Chanel 42%

Rolex 36%

Lacoste 33%

Dior 26%

Bally 26%

Best-known luxury brands:

Rolex 76%

Lacoste 72%

Valentino 71%

Chanel 66%

Dior 55%

Watch out. 22% of affluent consumers in China own a Rolex. 66% of affluent Chinese men have bought at least one watch in the past six months and have paid an average of $2,253 per watch.

Among popular luxury brands in China, Lacoste is perceived as having the highest quality

Top five watch brands:

1 Rolex

2 Omega

3 Cartier

4 Vacheron Constantin

5 Breitling

Chinese luxury consumers consider Bally, Chanel and Lacoste to be the brands most closely associated with high fashion

CONSPICUOUS CONSUMPTION Chinese consumers who buy luxury goods do so to show off or to help define their identity. The Asian concept of face--or pride and dignity--is a key reason they invest in expensive brands. In a fast-growing economy, status symbols are the easiest way to demonstrate wealth and power.

Most widely owned luxury brands:

1 Lacoste

2 Valentino

3 Chanel/Bally

Top luxury beauty brands:

The three most popular foreign beauty brands in China are Estee Lauder, Lancome and Guerlain. More than 50% of affluent Chinese consumers own either a Lancome or an Estee Lauder product.

On average, affluent Chinese consumers will spend up to $280 on a single skin-care product

Where they shop for Skin-care products:

[This article contains a complex diagram. Please see hardcopy of magazine.]

Department store 57% Boutique 20% Retail chain store 15% Outlet store 5% Internet 2% Catalog 1%

Saving face. Skin care is almost three times as popular in China as makeup. Imported foreign products dominate the high end of the market because beauty products tend to cost less than luxury fashion items, so women are willing to splurge on them. Skin-care sales in different regions of China account for 26% to 35% of total cosmetics sales.

This TIME Style & Design poll of 411 affluent Chinese respondents was conducted through personal interviews in June 2007 by GfK Roper at 54 different locations in Shanghai, Beijing and Guangzhou, including upscale shopping malls, boutiques, hotels, luxury-car dealerships and fitness clubs. Respondents made at least 15,000 yuan a month. The margin of error is +-5%.