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Luxury brands court Chinese students

On a recent blustery night, stylish Chinese college students lined the aisles of the Bloomingdale’s department store in downtown Chicago. They were sipping cucumber cocktails and checking out the latest fashions modeled by and for Chinese students.

They’d been invited by the high-end retailer in an effort to connect with a new generation of U.S. college student from Mainland China.

“The reason they want to reach us is very simple because we are going to buy their product,” said party attendee Kim, a marketing major at DePaul University.

Kim is one of the 274,000 Chinese students attending college in the States. That number has tripled in the last six years, cementing China as the biggest source of international students to the U.S. for several years running.

But these are not the thrifty Chinese grad students of yesteryear. According to the U.S. Department of Commerce, Chinese students (who are now about half graduate students and half undergrads) spent $8 billion in the U.S. in 2013 alone.

“These are the elites of the Chinese population,” said Peggy Blumenthal, a senior counselor at the Institute for International Education. “They’re mostly from cities and used to spending for big brands and used to having a new car and a new watch.”  

The spending power of these students hasn’t been lost on U.S. government officials.

Earlier this month, the state department relaxed rules on visas for Chinese students, expanding them to five years. As Secretary of State John Kerry was handing out the first batch, he told one Kansas University grad returning to the states to remember to “spend a lot of money.”

Wen Huang is a Chicago based writer and China watcher who came to Springfield Illinois as a Chinese grad student 24 years ago. And as he recalls it, things were very different then. 

“I came here with $76 in my pocket, which was the case with lots of Chinese students who came in the 1990s and 80s,” he said. “We would shop at Venture. That was like a Walmart place. We never had money to buy name brand stuff but we felt that everything that was made in America was name brand. On weekends we’d treat ourselves to Old Country Buffet and then go shopping at Venture.” 

Most students at that time came on scholarships, but the Chinese undergrads flooding American colleges today are supported largely by family money.

“They are the children of either government officials or the children of entrepreneurs who have amassed a huge fortune during China’s economic boom over the last 7 or 8 years,” Huang said.

Others come from middle class families who have channeled much of their resources into the future of their single child.

Chinese-American college student Solomon Wiener is majoring in East Asian Studies at Dennison University. Although he has traveled to China, he is still amazed by the spending power of this new wave of Chinese students.
  
“I drive a Lexus but my friend from China drives a Ferrari,” he noted before hitting the runway in a sleek gray Hugo Boss suit. “There is just a lot of cash coming from China and the kids are just able to afford these brands.”

That’s why Chicago-based publisher John Robinson recently launched a new digital magazine Mandarin Campus in addition to his flagship magazine Mandarin Quarterly. He co-sponsored the Bloomingdale’s event.

“Mandarin Campus was born out of brands’ increasing interest in this lucrative demographic that’s the Chinese university student,” said Robinson who spent several years in China and speaks fluent Mandarin. “The editorial focus is a little younger, a little more rock-and-roll than say Mandarin Quarterly, which is targeting sort of early-to-mid-career professionals.”

The stories in these two magazines focus on business and career advice, fashion, and dining and lifestyle issues. Much of the content would be at home in Chicago magazine, if Chicago were written entirely in Chinese. The magazines are aimed at helping readers fashionably navigate mainstream Chicago (and San Francisco and New York where Quarterly is also published). But, they are also about marketing these high-end brands.

“Brands like Omega, Burberry, Cartier, Tiffany, Bloomingdale’s and Saks have all reached out to our business and asked for our support in their efforts to effectively engage Chinese,” Robinson said.

Lavina, a Chinese marketing major at Loyola, served as one of the evening’s models, sporting fashions from Theory and Burberry. Like a lot of the students at the party, she lives downtown and shops along the Magnificent Mile. 
“There’s a lot of clothes I like to wear and the place I like to go shopping is at Bloomingdale’s,” she said. “I’m a very loyal customer because I live three blocks away, so it’s very near and convenient.”

The shifting financial dynamics of China have allowed the surge in enrollment at U.S. universities.  But what’s behind the new openness to parties and fashion that were never a part of student life for someone like Wen Huang?
“The current education system is different in mainland China,” said DePaul marketing major Caroline. “We are more open to the foreign cultures like American and European cultures.  We get more and more information about them and so when we came here we learned there are parties and different things we have to attend. We are starting to get used to that environment, and it is making us change.”

Despite the continued double-digit growth in Chinese enrollment last year, Huang predicted it will start tapering off soon.

He cited the slowing Chinese economy and the recent anti-corruption campaign under Chinese president Xi Jinping that has put the country’s rich and powerful under a microscope.

“Right now they are under close scrutiny,” Huang said. “And sending your children abroad is becoming an easy target for investigation.”

So does that mean Coach, Tiffany, Bloomingdale’s and Burberry are wasting their time courting the young Chinese consumer? Huang said no

Monica Eng is a WBEZ producer and co-host of the Chewing The Fat podcast. Follow her at @monicaeng or write to her at meng@wbez.org

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