How Apple Became China’s Most Coveted Luxury Brand

Lavish status symbols are giving way to the fusion of form and function

When a Chinese publishing group recently released its consumer survey of the luxury market in China, the top ranking wasn't held by a brand like Chanel, Louis Vuitton or Hermes. Instead, Apple was named this year's preferred brand for gifting among China's richest men and women.

The designation is not just a testament to Apple's awe-inspiring growth, which was illustrated quite profoundly by this week's not-so-outlandish investor claims that the company is worth close to $1.3 trillion. It's also a sign of the shift from luxury as status symbol to luxury as cultural code . Where status symbols show off economic success, codes are reflections of one's cultural capital.

"Apple has all the markings of a luxury brand: a tightly controlled narrative, considered design and metered supply, especially around launches and in certain emerging markets," says Colin Nagy, executive director of media at New York agency The Barbarian Group.

Here's a look at how Apple's standing in the Hurun Research Institute's survey of Chinese luxury consumers changed from 2014 to 2015:

The story of Steve Jobs' entrepreneurialism and extraordinary achievement resonates well with affluent Chinese. It's the story of their own striving reflected back at them. The newest iPhones are the cultural code of universal entrepreneurial success, giving Chinese efforts self-consciousness and recognition.

Carrying the newest iPhone, rather than the ubiquitous (and cheaper) competitors, is not just a sign of being able to afford it; it's a display of one's own entrepreneurial story in the tangible form.

Apple's entrepreneurial cred makes smartphone-as-luxury different from a luxury smartphone. Deeper bonds with consumers are not created through made-to-measure, diamond-encrusted smartphone covers. They are made through a strong story — something traditional luxury brands like TAG Heuer, Gresso, Tonino Lamborghini, Savelli, Bellperre or Brikk lack.

Like their Japanese or Western counterparts, China's wealthy elite are looking for smart technology that helps improve their overall lives, according to a study by Wearables.com and The Center for Generational Kinetics. 

But if modern luxury came down to just functionality, other smartphone brands would have found themselves crowning the Hurun Research's top 10 list, as well. Apple stands out.

(It's worth noting that Apple's growing reputation isn't the country's only change in luxury purchase behavior. According to last year's "Shock of the New Chic" report from Boston Consulting Group, the Chinese rich have also shifted their preferences from luxury goods to memorable experiences peppered with the thrill of danger, like swimming with sharks or expeditions to the Antarctic.)

It is a country with the largest number of mobile users and has been the world's biggest smartphone market since 2011. With an overwhelming number of Chinese consumers purchasing their first smartphones in recent years, it can be expected that Apple's aggressive market penetration strategy and its luxury clout will lead it to become the preferred brand of choice.

"Apple has created the same level of desire and passion for their products that equals or even exceeds what any luxury brand has for their products," says Julie Noiman, managing director of New York's Spring Studios, which counts Tom Ford, Canali and Cointreau among its clients. "When you look at the other players in [the consumer electronics] category,  the products trade on features and functionality. People just use them."

This is the sort of relationship that inspires people to loyally stand in line and pay full retail price for a new product from Apple, something they'd rarely do for a luxury good. "While Apple might not have the pure prestige of established, family-owned luxury brands like Hermes, they are reinventing the idea of luxury as it relates to technology," Nagy says. "I can't think of anyone that is close.

The evolving relationship between luxury and technology is something that hasn't been lost on the fashion industry. "Fashion and luxury brands elevate Apple by constantly making digital technology the focus of their campaigns" says Andreas Neophytou, senior creative director at Spring Studios. "In this way, Apple has been ingratiated into the fashion world."

But the company also captures the wider shift in how we think about luxury.

Louboutin's red sole, Chanel's quilting and Apple smartphones provide a narrative that we can identify with and aspire to, in an intrinsic, club-like, unobtrusive way. They are meant to express our own personal quality of life. Codes are reflections of the things we do, adventures we enjoy and places we see.

"Luxury is ultimately about creating memorable experiences—not pretty products," says Nicole Victor, partner and svp of planning and strategy at New York-based digital agency Rumble Fox, who has Tiffany&Co. as a client. "Luxury is access. Luxury is knowledge. Luxury is not just a thing you buy."

Ana Andjelic is a strategist focused on global luxury and fashion brands. Follow her on Twitter at @andjelicaaa or visit her website to learn more about her work with agencies and brands.