2022
0
China Digitalisation in Luxury Market Report 2022
2022-08-03T04:25:46+01:00
OX1103117
3695
153870
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Report
en_GB
“Chinese consumers are among the quickest and most open to adopting online luxury shopping and COVID-19 has accelerated the speed luxury brands are embracing ecommerce. However, digitalisation is not just…

China Digitalisation in Luxury Market Report 2022

£ 3,695 (Excl.Tax)

Report Summary

“Chinese consumers are among the quickest and most open to adopting online luxury shopping and COVID-19 has accelerated the speed luxury brands are embracing ecommerce. However, digitalisation is not just another sales channel but should be an integral part of omnichannel retailing and consumer experience with the brand. There is also no one-size-fits-all approach to digitalisation. Besides top ecommerce platforms, which still lead in purchase conversion rate, each type of digital channel comes with its own strengths for brands to deploy.”
– Jocelyn Dong, Research Analyst

Key issues covered in this Report

  • What are the most frequent online sourcing information of luxury for consumers
  • Consumers’ interested content in digitalised campaigns
  • How open are consumers towards digitalisation in luxury
  • Consumers’ willingness towards digital luxury products, such as NFTs

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definitions
          • Excluded
          • Executive Summary

              • The market
                • Demand for luxuries hindered as financial confidence hit by COVID, but long term desire for luxuries remains strong
                  • Figure 1: Confidence about improving financial situation in the next three months – very/somewhat confident, by income, 2022
                  • Figure 2: Desire for luxury spending – desire a lot and desire, 2020-2022
                • Luxury brands are quick to embrace digitalisation as China leads ecommerce development
                  • Companies and brands
                    • Enrich the virtual experience through personalisation and fun
                      • Enhance online shopping with better services
                        • Live streaming as the new content marketing
                          • The consumer
                            • Going beyond information sharing
                              • Figure 3: Consumers’ online interaction with luxury brands, by online luxury buyers and non-buyers, 2022
                            • Tmall and JD have better conversion rates, while professional platforms are more differentiated
                              • Figure 4: Information platforms consumers followed for luxury goods, by online luxury buyers and non-buyers, 2022
                            • Majority of consumers buy both online and offline, suggesting omnichannel retailing is the ultimate strategy for luxury brands
                              • Figure 5: Consumers’ purchasing channels for luxury goods, 2022
                            • After-sales service is a must, while flexible payment can help retailers or brands attract more young consumers
                              • Figure 6: Consumers’ considerations when buying luxury online, 2022
                            • Leverage digital marketing to further “humanise” luxury brands
                              • Figure 7: Consumers’ interested digital marketing, 2022
                            • Consistent brand image and experience are key to doing digitalisation work for luxury brands
                              • Figure 8: Consumers’ attitudes towards digitalisation in luxury, 2022
                            • What we think
                            • Issues and Insights

                              • NFTs could mean more than virtualising physical products
                                • The facts
                                  • The implications
                                      • Figure 9: SuperGucci by Gucci and Superplastic
                                    • Traditional ecommerce platforms: differentiating through services
                                      • The facts
                                        • The implications
                                          • Figure 10: Luxury shopping on JD with product maintenance and pay-by-instalment options
                                        • No one-size-fits-all approach to digitalisation for luxury brands
                                          • The facts
                                            • The implications
                                                • Figure 11: Louis Vuitton’s notification on its mini-program and Farfetch’s post
                                            • Market Factors

                                              • The rapid growth of ecommerce is forcing luxury brands to change
                                                • Virtual experiences are on trend
                                                  • Strong demand and consumption power beyond tier one cities
                                                    • Younger generation has strong consumption power
                                                      • Growing duty-free stores in China market
                                                      • COVID Influences

                                                        • COVID-19 China context
                                                          • COVID-19 impact on the market and consumer
                                                            • Immediate loss of sales due to closed offline stores and logistical disruptions blocks distribution
                                                              • Longer-term impact of falling financial status and discretionary spending
                                                                • Figure 12: Confidence about improving financial situation in the next three months, China, 2022
                                                                • Figure 13: Confidence about improving financial situation in the next three months, Shanghai, 2022
                                                                • Figure 14: Confidence about improving financial situation in the next three months – very/somewhat confident, by income, 2022
                                                                • Figure 15: 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 16: Desire for luxury spending – desire a lot and desire, 2020-2022
                                                              • Reliance on ecommerce will continue after the lockdown
                                                                • Figure 17: Impact of new wave of COVID-19 outbreak on lives, China, 2022
                                                                • Figure 18: Offline grocery shopping channel in China, 2022
                                                                • Figure 19: Online grocery shopping channel in China, 2022
                                                            • Marketing Highlights

                                                              • Create avatars in the metaverse to allow self-expression
                                                                • Figure 20: Gucci Garden Archetypes and Gucci Garden Virtual Exhibition on Roblox
                                                                • Figure 21: Mytheresa’s avatar
                                                              • Gamification answers consumers’ desire for fun and nostalgic experiences
                                                                • Figure 22: Consumer index on key factors driving consumer behaviours around the Experiences Trend Driver
                                                                • Figure 23: Louis Vuitton’s game
                                                                • Figure 24: B Bounce, Ratberry and B surf by Burberry
                                                                • Figure 25: Balenciaga’s 520 virtual arcade on WeChat
                                                              • Build exclusive online services
                                                                • Figure 26: Burberry’s video consultants service on Tmall
                                                              • Experiment with AR technology to enhance shopping experiences
                                                                • Figure 27: Burberry’s online mini-program for appointments
                                                              • Live streaming harnessed as a new channel for fashion shows and storytelling rather than sales
                                                                • Figure 28: Dior’s 2020 collection live stream
                                                                • Figure 29: Lanvin’s post on Xiaohongshu
                                                            • Online Interaction with Brands

                                                              • Silent attention rather than deep interaction
                                                                • Figure 30: Consumers’ online interaction with luxury brands, by online luxury buyers and non-buyers, 2022
                                                            • Followed Online Platforms

                                                              • Live streaming is important, but Farfetch-like shopping platforms are most differentiating luxury buyers and non-buyers
                                                                • Figure 31: TURF Analysis – information platforms consumers followed for luxury goods, 2022
                                                                • Figure 32: Information platforms consumers followed for luxury goods, by online luxury buyers and non-buyers, 2022
                                                                • Figure 33: Tmall Pavilion
                                                              • Tmall/JD and WeChat have the highest purchase conversion
                                                                • Figure 34: Conversion rate of informational channels, 2022
                                                            • Purchasing Channels

                                                              • Digitalisation needs to be part of omnichannel retailing and marketing in luxury
                                                                • Figure 35: Consumers’ purchasing channels for luxury goods, 2022
                                                              • Significant increase in willingness to buy luxury online in China
                                                                • Figure 36: Consumers’ purchasing channels for luxury goods, 2016 – 2022
                                                              • Offline shopping sees shift in channels in the last five years
                                                                • Figure 37: Consumers’ purchasing channels for luxury goods, 2022
                                                                • Figure 38: Posts of buyers’ stores on Xiaohongshu
                                                              • Second-hand luxury markets are developing
                                                                • Figure 39: Luxury products purchased by type of second-hand luxury shopping channels, 2022
                                                                • Figure 40: Consumers’ shopping considerations for luxury goods, by second-hand purchasing channels, 2022
                                                            • Consideration Factors when Shopping Luxury Online

                                                              • After-sales services and comprehensive products are key to reassuring online buyers
                                                                • Figure 41: Consumers’ considerations when buying luxury online, 2022
                                                              • Younger consumers care more about flexible payments, while older consumers need more information
                                                                • Figure 42: Consumers’ considerations when buying luxury online, by generation, 2022
                                                              • Higher requirements for ecommerce platforms
                                                                • Figure 43: Consumers’ considerations when buying luxury online, by purchasing channels, 2022
                                                            • Interested Digital Marketing

                                                              • Introduce brands’ culture by creating or collaborating with IPs
                                                                • Figure 44: Consumers’ interested digital marketing, 2022
                                                              • High interest in NFTs is driven more by investment potential
                                                                • Figure 45: Consumers’ attitudes towards NFT products, by income level, 2022
                                                                • Figure 46: Consumers’ attitudes towards NFT products, by interested digital marketing, 2022
                                                            • Attitudes towards Digitalisation in Luxury

                                                              • Instalment payments may make luxury consumption more accessible
                                                                • Figure 47: Consumers’ attitudes towards instalments, by purchasing behaviours, generation, income and city tier, 2022
                                                              • Consumers don’t see ecommerce channels in the same way
                                                                • Figure 48: Consumers’ attitudes towards luxury brands’ participation in the promotion of ecommerce, by age and income level, 2022
                                                                • Figure 49: Purchasing channels for luxury goods, by consumers’ attitudes towards luxury brands’ participation in the promotion of ecommerce, 2022
                                                              • Consumers are more open about live streaming promotions
                                                                • Figure 50: Consumers’ attitudes towards luxury brands’ live streaming promotion, by age, city tier and income, 2022
                                                              • Those who are open towards luxury brands doing live streaming focus more on the products
                                                                • Figure 51: Consumers’ definition of luxury, by their attitudes towards luxury brands’ live streaming promotion, 2022
                                                            • Appendix – Methodology and Abbreviations

                                                              • Methodology
                                                                • Abbreviations

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