The diminutive Angelica Cheung presides over Vogue China from her office in one of Beijing’s many tower blocks. She is funny, incisive, and charming – as only the head of the country’s most outrageously successful publication can be. This is a woman who – in the midst of a crisis that has pitted publishers against each other in a to-the-death fight for advertising ink – actually needs to continually increase editorial volume to keep up with advertising demands. Vogue China currently runs at 300 editorial pages each month, in comparison with American Vogue’s approximately 100 pages of editorial copy.

“There is so much demand for the prime advertising positions,” Cheung told INSEAD Knowledge in Beijing recently, “that we’re under continuous pressure to keep up with the content.” In short, Angelica Cheung and Vogue have detonated the explosion of China’s demand for luxury.

Vogue China debuted in September, 2005 – September being the month the fashion industry presents its fall-winter collections in the edition that’s fondly known as “the fashion bible” of the year. The initial run of 300,000 copies sold out, necessitating a second printing.

Commanding the luxury market

This is not surprising for a country predicted by no less than the Hurun Report to boast nearly a million millionaires, who – along with a burgeoning middle class – are expected to consume nearly half of the world’s luxury goods by 2020, worth some US$27 billion. Vogue’s readership reflects the profile of the Chinese luxury consumer.

“Our readership is relatively young,” explains Cheung. “Our target readership is mainly from 20-40, and our average age reader is about 30, and most of these are women. Obviously you have the top tier – rich men’s wives and daughters – but there is a large chunk of women who have made their own fortune. These are entrepreneurs, senior executives – there are a lot of working women in our readership portfolio. And then there’s the third tier: students. Unlike the other 17 Vogues in the world, we have quite a big chunk of younger readers who are not in that consumption bracket yet – meaning they don’t have the money to buy Chanel every day – but they aspire to that kind of lifestyle.”

Cheung sees her job as not just catering to Chinese luxury tastes but refining that taste and training luxury consumer wannabee’s. “What happened in China over the past five or six years is what has happened in the Western world in the past 50 or 60 years. So in a couple of years’ time, these younger readers will transform into totally different kinds of consumers,” Cheung predicts. “So it is very important for the magazine to educate the readers who are not major spenders…yet.”

There is a discernible pattern to initial luxury purchases among the Chinese, it seems. “China is a kind of logo-maniac kind of market,” says Cheung. “I have friends who only knew Louis Vuitton a few years ago; today they are wearing Balenciaga, Balmain, they go to shows, they know what is going on.”

Each year brings a host of new wealthy customers to the market in China and while these new arrivals may have the money to buy luxury goods, they lack…well…taste. “When these people suddenly have money, they want to treat themselves well, and their first reaction is to buy the most obvious thing – which are the products with logos,” explains Cheung.

Godart elaborates: “Chinese consumers see luxury goods as a way to express status more than their own style and identity,” he says, “though there are signs this could change in the next decade or so as customers get more acquainted with luxury products.”

Bridging that gap and educating the public is one of Cheung’s missions as Editor of Vogue. “I feel there is a certain sweetness in this lack of knowledge,” she says of China’s new luxury customers. “They were probably working in fields or mines just a few years ago and I feel that the attitude should be to help them, to guide them, let them experience and then they will know better what suits them. If they don’t have that entry point to experiment, they will never know. You don’t sneer at these people. You help them and through including them, you educate them better and they will become more sophisticated.”

But while Western luxury goods makers are fretting over how many more shops to open and how to properly translate their names to Chinese if at all – the Chinese themselves are developing home-grown luxury brands that could soon be vying for boutique space in Paris, Milan, London and New York. The Chinese competition is coming on two racks.

Home-grown brands

“There are the big fashion enterprises – White Collar, Erdos, and the like,” explains Cheung. “They started doing basic trousers, tops, shirts and dresses and then they moved on. These are huge businesses, and they want to upgrade themselves. Then there are the new young fashion creators who themselves are the product of the new China.”

So the future looks bright on both the consumer and the creator fronts in China. “The middle class (in China) is growing, so the whole industry will grow along with it” opines Cheung. “Different brands keep opening shops and somehow they all have business. …Now we are still in the first few years when people are grabbing Vuitton bags and Chanel shoes …but what will we do for the second phase? We need to anticipate what the consumers will become in ten years’ time when they already have everything. So I think the planning needs to start now.”

And no doubt Vogue China will be part of the plan.