What $6,400 Toilets Say About China Consumers

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Charles Sizemore, InvestorPlace.com

ROCKVILLE, MD (InvestorPlace) -- Kohler, the American plumbing fixtures manufacturer, now sells the $6,400 Numi luxury toilet in emerging markets like China. Driven by the demanding tastes of China's newly wealthy, the Numi features a heated footrest and a "sleek iTouch style remote," according to the Financial Times. The gadget controls an internal music system, the adjustable bidet and the temperature of the seat.

It also allows the user to play video games, read e-books, and call friends on Skype. Yes, Skype. The press release didn't elaborate on whether Skype's video conferencing features are enabled; I sincerely hope they are not.

This story about a tricked-out toilet is good for a laugh, but it also is a serious example of the potential of emerging markets. Consumers in regions like China have money to burn on consumer and luxury goods, even as Americans are cutting back.

Historically, Western luxury goods firms have sold items to China and other emerging markets that were originally designed for American and European tastes. This is changing. Suffice it to say, Americans are not interested in Skyping each other while sitting on the can. The Numi luxury toilet is a very expensive piece of engineering built by an American company specifically with a Chinese consumer in mind.

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Separately, the Italian luxury group Prada has decided to go forward with its initial public offering. But rather than list the shares in Milan -- or even London or New York -- Prada has opted for Hong Kong. In floating its shares in Asia rather than its home market, Prada is making a very public statement of where the company sees its future. Investors, take note.

So how can you profit from China's love affair with luxury? Here are three easy ways:

The world's largest purveyor of premium spirits, the UK-based Diageo (DEO), has the No. 1 premium scotch whisky in the world by sales in Johnnie Walker, and the No. 1 premium vodka in Smirnoff. In Tanqueray gin, Bailey's Irish Cream, Jose Cuervo tequila and Guiness Irish stout beer, Diageo also enjoys category leadership.

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