China Attitudes towards Luxury Market Report 2022
£ 3,695 (Excl.Tax)
Report Summary
“Treating oneself is increasingly becoming an important driver for consumers’ spending, and it is particularly true when looking at consumers’ definitions of luxury which has evolved towards words that evoke spiritual enjoyment, such as “indulgence” and “pleasure”. Consumers value the nice experience and feelings brought about by having a luxury item more than the object itself. Chinese consumers today hold immense pride for their local cultures and traditions. International luxury brands would need to pay particular attention to this sentiment and adopt a better way to connect with the Chinese consumers. Showing genuine understanding and respect to Chinese cultures and coming closer to the local lives of people could be a winning strategy for luxury brands looking to thrive in the China market.”
– Jocelyn Dong, Research Analyst
This Report looks at the following areas:
- Consumers’ definition of luxury
- Purchased luxury goods and services by category in the past 12 months
- Future purchase interests in luxury goods and services
- Consumers’ expectation for localisation of international luxury brands in China
- Luxury personalisation favoured by consumers
- Luxury influencers
Table of Contents
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Overview
- What you need to know
- The key issues covered in this Report
- Covered in this Report
- Excluded
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Executive Summary
- The market
- Domestic duty-free and online channels driving luxury shopping
- Strong consumption potential in younger generation and lower tier city consumers
- COVID-19 impact on luxury market and consumer
- The consumer
- Definition of luxury evolving towards spiritual enjoyment
- Figure 1: Consumers’ definition of luxury, 2022
- Handbags and accessories are the most popular items
- Figure 2: Purchased luxury products and services in the past 12 months, 2022
- Physical products are popular, while premium service shows potential
- Figure 3: Consumers’ future purchasing interests in luxury products and services, 2022
- Promoting Chinese culture is highly expected by consumers towards the localisation of international luxury brands
- Figure 4: Consumers’ expectation towards brands’ localisation, 2022
- Differentiated services are key to luxury personalisation
- Figure 5: Expectations for personalised services from luxury brands, 2022
- Delivering the right brand image and message to consumers through the right spokespersons
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- Figure 6: Impressions of different spokespersons for luxury brands, 2022
- What we think
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Issues and Insights
- Respect and value local culture to win over Chinese consumers
- Figure 7: Prada’s campaign with a local wet market in Shanghai, 2021
- Delivering positive emotional value to consumers through the right spokesperson
- Respect and value local culture to win over Chinese consumers
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Market Factors
- Domestic duty-free shopping zones driving luxury consumption
- Young generation showing potential in luxury spending
- Strong demand and consumption power in lower tier cities
- Prominence of ecommerce in China prompting luxury brands to keep going digital
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COVID Influences
- COVID-19 China context
- COVID-19 impact on the market and consumer
- Immediate loss of sales due to closed offline stores and logistic disruption resulting in supply shortage
- Longer-term impact from falling financial status and discretionary spending
- Figure 8: Confidence about improving financial situation in the next three months, China, 2022
- Figure 9: Confidence about improving financial situation in the next three months, Shanghai, 2022
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- Figure 10: Confidence about improving financial situation in the next three months – Very/somewhat confident, by income, 2022
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- Figure 11: Sectors consumers have spent more on compared to the last three months, 2022
- Desire for luxury remains strong, but brands will need more marketing efforts to nudge purchases
- Figure 12: Desire for luxury spending – Desire a lot and desire, 2020-2022
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Marketing Activities
- Create immersive shopping experience
- Figure 13: Ralph Lauren’s smart retail store
- Convey brand story through engaging games
- Figure 14: Louis Vuitton’ game
- Approach consumers with emotional value
- Figure 15: Prada’s possible conversation
- Figure 16: Prada’s recommended books and music in April list
- Create immersive shopping experience
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Who’s Innovating
- Enriching athleisure offerings
- Figure 17: LV’s heart rate monitoring wrist watch: Tambour Horizon Light Up
- Figure 18: Sneakers and bowling bags launched in Dior Vibe series, 2022
- Expanding products outside of fashion
- Figure 19: Gucci Stationery
- Enriching athleisure offerings
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Consumers’ Definition of Luxury
- Definition of luxury evolving towards spiritual enjoyment
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- Figure 20: Consumers’ definition of luxury, 2022
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- Figure 21: Consumers’ definition of luxury, 2016 vs 2022
- Non-spenders tend to care more about the practical side of luxury
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- Figure 22: Consumers’ definition of luxury, spenders vs non-spenders, 2022
- Marketing to different age groups
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- Figure 23: Consumers’ definition of luxury, by generation, 2022
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Purchased Luxury Products/Services
- Handbags and accessories are most favoured
- Figure 24: Purchased luxury products and services in the past 12 months, 2022
- High earners continue to be the mainstay of luxury spending
- Figure 25: Purchased luxury products, by monthly personal income, 2022
- Handbags and accessories are most favoured
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Future Purchasing Interests in Luxury
- Beauty products are prevailing, and premium travelling has potential
- Figure 26: Consumers’ future purchasing interests in luxury products and services, 2022
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- Figure 27: Consumers’ future purchasing interest in premium travelling, by family structure, 2022
- Beauty products are prevailing, and premium travelling has potential
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Expectation for Localisation of International Luxury Brands
- Promoting Chinese culture is highly expected
- Figure 28: Consumers’ expectation towards brands’ localisation, 2022
- Localisation plus personalisation could be immensely appealing
- Figure 29: Consumers’ expectation towards personalisation, by expectation towards brands’ localisation, 2022
- Promoting Chinese culture is highly expected
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Personalisation in Luxury
- Differentiated experience is key to personalisation
- Figure 30: Expectations for personalised services from luxury brands, 2022
- Pet owners and multi-generation families seek customised services
- Figure 31: Selected expectations for personalised services from luxury brands, by living situation, 2022
- Differentiated experience is key to personalisation
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Luxury Influencers
- Senior celebrities and business leaders are bywords for trustworthy
- Figure 32: Impression of senior celebrities and business leaders as spokespersons for luxury brands, 2022
- Designers and artists stand for professional
- Figure 33: Impressions of famous designers and artists as spokespersons for luxury brands, 2022
- Young pop stars and models are perceived to be fashion leaders while KOLs and virtual idols are catching up
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- Figure 34: Impressions of young pop stars, famous models, and influencers/KOLs and virtual idols as spokespersons for luxury brands, 2022
- Athletes represent an energetic image
- Figure 35: Impressions of athletes as spokespersons for luxury brands, 2022
- Senior celebrities and business leaders are bywords for trustworthy
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Appendix – Methodology and Abbreviations
- Methodology
- Abbreviations
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