The Chinese luxury market evolution
In 2013, Chinese luxury market is evolving in 3 main ways:
- Firstly, more and more Chinese travel and buy luxury goods overseas
- Secondly, internet use has a big impact on the luxury consumption in China
- Thirdly, national luxury brands are emerging and will change play rules of the luxury market in China which was leaded by foreign brands, especially European brands.
In this article I would like to give you a basic understanding of the current keys of this market.
(click on the pics to make it bigger)
1. Luxury goods are more and more purchased overseas
1.a. Traveling increasing.
The first key of luxury goods consuming evolution is the increasing of Chinese travellers. They were 53% in 2008, they are 71% today. Most of them travel overseas for leisure, but business trips represents 56% of the total trips in a year.
- Chinese people improved their standard of living these last few years, despite the international economy crisis. As a consequence Chinese travel more than before.
- According to Global Blue (a tax free statistics company), Chinese tax free shopping rose by 58% in the third quarter of 2012 (July-September) in comparison to the same period in 2011 and the total Chinese tax free shopping accounted for 26% of total free shopping in 2012.
- b. Where do Chinese buy luxury goods?
- Hong Kong is a very important place for the Chinese luxury market. Indeed, Cosmetics represent 22% of total Chinese consumption of luxury goods overseas whereas Watches represent 23, 3% of this market.
2. The impact of internet use on the Chinese luxury market
2.a. More and more people are looking for information about luxury brand products on internet.
Internet is a real asset for brands that know how to use it. Indeed, 30% of Chinese consumers say information found on internet play a significant role in their choice of brands and 45% think internet allows to understand brands key features. Finally almost 40% of respondents think internet provides trust about brands.
- People are more and more interested on buying luxury goods on internet.
According to the KPMG Luxury study 2013, 40% people say they are somewhat or very much interested in purchasing luxury goods on internet in 2012, increase by 22% in 2011.
- Chinese people use internet more and more often
- They are connected with their phone and computer all day long
- E-commerce in China is very popular and is evolving very quickly
E-commerce is the most exciting field in China nowadays. E tailing offers a lot of big opportunities in China especially though Taobao, the first e-selling platform in the world, which has a specific shopping channel named “Global Shopping” to buy goods overseas on behalf of Chinese customers. If you want to know more about e-commerce in China, click here.
- The emergence of Chinese luxury brands
A new rich social category of has recently emerged in China. Those Party members and captains of industry are more and more looking for local luxury brand to differ from new rich stereotypes. The First Lady Peng Liyuan has a real promotion influence of local luxury brands: “Big luxury brands in Europe or America are often the first choice for many rich Chinese consumers when they dress up (…) But I believe top local fashion brands will draw much more attention among buyers at home in the future after Peng showed her elegance and confidence in wearing home-grown labels” said Hong Dongni, an adviser with Golden Wisdom Fashion Brands Management Consulting Centre in Beijing.
Today, local luxury brands represent 5% of market shares in China. Moreover, Chinese luxury brands export their creations. Actually, 70% of NE Tiger’s creations (Chinese haute couture brand) have been sold in Europe and in America, parts of the world’s internationally famous for their haute couture creations.
Many European brands are adapting to this market change already. For example, Hermes has created the brand Shang Xia, dedicated to the Chinese market. This brand’s clientele is composed by 60% Chinese and 40% of foreigners.
The emergence of Chinese luxury brands in China and in the world is reflecting the economy maturity of the country. China is getting back its previous aura as a super power, and people are proud to be Chinese. Even if European brands are not threatend, Chinese brands will have more and more importance on the Chinese and international market.
By Leïla Hatoum