Buying 1/3 Of The World's Luxury Goods How Do The Rich People In China Pick Up Their Hands

- Apr 11, 2019 -

The global luxury goods giants can finally take a breather.


Judging from the earnings reports released by several international luxury goods groups, the performance of many luxury goods groups has rebounded significantly, and the luxury goods industry has shown signs of recovery.


According to Bain's 2017 Global Luxury Industry Research Report, the global luxury goods market will reach 1.2 trillion euros in 2017, and the personal luxury goods market has a record high, 32% of which comes from Chinese consumers.

Who is buying?


The industry generally believes that one of the main reasons for the recovery of the luxury goods industry is the recovery of Chinese customers' purchasing power. According to data provided by McKinsey, by 2020, China will have 7.6 million households spending about 1 trillion yuan of luxury goods, and Chinese consumers can be described as "one of the biggest forces driving global luxury consumption."

Who is this "mysterious oriental power" made up of?


Middle class


In the past, Chinese luxury consumers were mainly made up of people who belonged to high-income families. But now, the rich in China only account for one-third of China's luxury consumption, and the growing “emerging middle class family” (with annual disposable income between $10,000 and $16,000) is becoming the mainstay of luxury consumption. engine.


The data shows that the increase in the demand for luxury goods in the middle class has greatly promoted the sales of luxury goods in mainland China. In 2017, the growth rate reached 15%, the highest in each market, and the total market value reached 20 billion euros.


Professional woman


The book "luxury the Chinese Way" has written that China's luxury market is "mainly dominated by men." But now, the purchasing power of Chinese women has increased significantly. The travel news site Skiift even reminds luxury marketers to focus on professional women in China.


The consumption potential of Chinese women is gradually being discovered. According to a Boston Consulting study, 62% of China's consumption is dominated by women, and the overall market for female consumption exceeds $2.6 trillion. For luxury brands, female consumers are more loyal and have a willingness to spend, and it is worth spending more on them.


Millennials


The recovery in the luxury market has also benefited from the “millennials” (18 to 34 years old, whose consumption accounts for 85% of the total growth. It is expected that by the year 2025, “millennials” will account for 45% of luxury customers). It is worth noting that Chinese luxury consumers are younger than European and American countries, and the average young age is only 33. They are more familiar with the Internet, and their “loyalty” is lower. It is difficult for the old marketing strategy to impress them. The new generation is often more skilled. Consumer.


In order to cater to younger audiences, LOUIS VUITTON, the world's largest luxury brand, used the virtual character Lightning of the game Final Fantasy as a spokesperson in the "Series 4" advertisement. Especially in Greater China, luxury brands have also lowered the "noble head": Li Yifeng endorsement TAG Heuer (Tiger TAG Heuer), Wu Yifan endorsement Burberry, Hu Ge endorsement Armani, Ni Ni endorsement GUCCI, Gulin Naza endorsement FENDI... ...


how to buy?


From offline to online, from abroad to China, Chinese consumers influence luxury brand decision makers.


Online platform


In the past, luxury brands have been keeping away from e-commerce platforms due to platform image and fake issues. However, with the upgrade of consumption, the luxury consumption potential of high-end consumer groups in second- and third-tier cities is being stimulated, and the e-commerce platform makes up for this market demand gap. The Deloitte report shows that about 40% of the young luxury consumers trade through digital channels.


In recent years, major luxury brands have also stepped up their online presence in China: Christian Dior launched Valentine's Day custom models through WeChat public number H5 page, Mr.Porter and Burberry have settled in Tmall, JD.com and British department stores Harrods, Paul Smith and others have reached a partnership...


In the second half of 2017, the Tmall luxury channel Luxury Pavilion and the Jingdong luxury warehouse Toplife were put into use to help sell luxury goods in China. On the day of “Double 11”, only Jingdong sold 400,000 watches, of which TAG Heuer sales exceeded one month last year, and Italian brand Armani sales were better than 27 times year-on-year... King Daily, the authoritative media in the luxury goods industry, said: “ American retailers want to make the Double 11 a luxury black Friday."

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