At a time when many major luxury brands are scratching their heads over ways to improve their sluggish business, China's double digit increase of affordable luxury in 2013 has definitely drawn some covetous looks.

As the concept of affordable luxury is embraced by a growing number of people, many consumers are abandoning flashy luxury brands for quality products with a lower profile.

A luxury research report released by Euromonitor, an international market research institute, shows that one of the major driving forces behind the development of the international luxury market in 2013 was affordable luxury. In particular, the promising development prospects for the affordable luxury market in China have attracted foreign capital into the country. Affordable luxury brands such as Furla and Kate Spade have been very active in their search for local business partners to explore the Chinese market in 2013.

According to Zhou Ting, president of Fortune Character Institute, a China-based professional research and consultancy that studies the lifestyles of the wealthy, consumers are becoming weary of traditional luxury brands and are looking for new brands to satisfy their increasingly diversified demands. "(That's why) we're seeing this consumption paradigm shift from the familiar brands to the more contemporary ones," says Zhou.

Guo Fanli, manager of CIConsulting, a Chinese industry research consultancy, believes that business growth of affordable luxury in China stems from the fact that middle and lower income consumers want to feel privileged by purchasing medium-priced products from the less well known foreign brands. "Potential luxury consumers feeling pressure from various other demands on their finances have to choose the second best stuff, that is the low-end luxuries," says Guo. "And brand loyalty and value-added services are completely off their list."

Chen Rui, partner of Adfaith, a consulting firm based in China, is positive about the future of affordable luxury in China. "The purchasing power of luxury goods has been gradually shifting from the social elite to the middle class in China, and it follows that the affordable luxury products which target the middle class will see steady growth in the future."

Zhou Ting, however, believes that customer loyalty to affordable luxury brands is lower than that for traditional luxury brands and he therefore has concerns about the long term development of affordable luxury. "The sustainability of the growth of affordable luxury doesn't look so good to me. The high-speed increase of affordable luxury is likely to continue for another 2 to 3 years, perhaps 5 years, but in the long run the business will not be very profitable," he says.