A short walk in the heart of Beijing’s Dongcheng financial district explains a lot. It is a microcosm of the luxury market in this nation of almost 1.4 billion people. In just a few blocks are Gucci and Chanel outlets, at least two stores each for Rolex, Cartier and Hermes plus Aston Martin, Ferrari and Mercedes dealerships.

Only a tiny percentage of Beijing residents can afford to shop here, but with a population of more than 21 million, a tiny percentage of Beijing equals a lot of customers. Multiply this many times over with giant megacities throughout the country and you understand why China is, or soon will be, the largest global market for many luxury brands.

And there is all the more wiggle room because there are no indigenous brands to compete with. After decades of communist rule, China is not a petri dish for home-grown companies catering to the world’s wealthiest 1%.

“We have our own products but no luxury brands,” says Jacky Jin, vice principal of The Trends Academy, a Chinese consulting company.  

Nevertheless, China’s surging middle and upper classes have developed a huge appetite for luxury. Wealthy Chinese consumers especially like European brands for their rich heritage.

“For a Chinese consumer, a good product must have a long history,” says Lily Liu, general manager of Lanvin China, a unit of the internationally known design house.

In China, history equals value, Liu says. A long product history is important because it is something that can’t be imitated or copied, she says. And that is why so many foreign companies in China talk about their history rather than their products. And that is why every new Lincoln dealership here will display a classic Lincoln from the automaker’s storied past, when it was the toast of presidents and movie stars.

Lincoln’s China market strategy is aimed at reaching the country’s youngest luxury buyers, who are not as notoriously status conscious as their elders. They are 30 to 45 years old, distrustful of current dealer sales and maintenance practices, less enamored with conspicuous consumption and are looking for something different from the same old strudel they grew up with.

“Years ago, the most popular (women’s) handbag was one with a lot of logos on it,” Pei-Wen Hsu, deputy general manager of Lincoln China tells WardsAuto. “But now it is different. People are looking for things that are subtle, with more substance. They want to show their taste rather than their social status. They want to be different in a very personal way. They are not looking for bling, bling in your face anymore.”