When Louis Vuitton hosted the launch of its first Chinese flagship store in Shanghai, it was a truly glamorous affair. VIP guests quaffed champagne from flutes, while models wearing fur coats strutted about a shop floor that was covered in the brand’s gilt-lined steamer trunks.

That was 2004. Back then, luxury was fresh, new and exciting. The spend was big, the cars fast and the wallets fat. The market was being driven by the country’s wealthy consumers and elite renminbi millionaires. They bought big and bold, and wanted to show off that they could afford it. Since then the market has grown to an astounding $9 billion, according to McKinsey, and has overtaken Japan to become the world’s second largest luxury market. And it’s still growing. According to research consultancy Bain & Co, it’s predicted to expand by 25% by the end of this year.

Now in 2011, things are a little different. Sure, there’s still some conspicuous consumption, but for the majority of consumers, the taste for luxury has largely changed. ‘Generally, Western perceptions tend to be that Chinese consumers are still immature regarding luxury,’ says Jonathan Hasson, Co-Director of Luxury Concierge China. ‘They think of bling, excesses and brashness. But having been exposed to luxury for over a decade, Chinese consumer tastes and needs have matured rapidly.’ Nick Marshall, a luxury consultant that specialises in emerging markets, agrees, and says how many consumers now embrace much deeper values. It’s not just about showing off wealth, but showing off good taste. ‘They’re looking to demonstrate outwardly that they also know what to do with their money, and show that they’re sophisticated and cultured.’

To add to the complexity of the market, there’s also a disparity between the tastes of the old wealth and the young, according to Marshall. ‘The existing, more mature luxury consumers are becoming more sophisticated and discerning,’ says Marshall. ‘Whereas the new, younger consumers in more cosmopolitan cities such as Shanghai and Beijing often have a greater international outlook.’