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China: The Next Luxury Empire
In 2008, China’s super-rich bought a quarter of the world’s luxury goods. In 2009, China has overtaken the US to become the world’s second largest luxury market. 2012, is China replacing Japan as the world’s most fanatical consumption country next year?
No one can easily ignore this fast growing market. Many luxury firms see Chinese shoppers as a potentially huge group of status-conscious, increasingly wealthy people hungry for brands and fanatical about shopping. The world’s priciest and most prestigious luxury brands are scrambling to erect massive retail shrines in China’s toniest shopping districts.
Who are major luxury consumers in China? Why do they eager for luxury goods? How Chinese luxury consumption growing so fast? Mckinsey Insights China released “Understanding China’s Growing Love for Luxury.”
Fast Growing Luxury Consumption in China
With the fast growing of Chinese economy, luxury goods are booming in China as well. Even in the teeth of the global recession in 2009, many other markets are flat or shrinking, luxury goods still saw 16% sales growth in China.
China’s Four Categories of Luxury Consumers
Mckinsey identified four distinct segments of luxury consumers in China. “Core luxury buyers” are those affluent households spend 12% to 20% of their income on luxury goods. Besides that major segment, “luxury role models” and “fashion fanatics” will make up one-third of the luxury market by 2015. The “middle class aspirants”, which is smaller but growing rapidly.
Top Buying Factor
Brand value become more important buying factor in the last few years. “International well-known brands” have replaced innovative design as one of the top 3 factors consumers consider when purchasing these goods.
Embracing eCommerce and Digital Marketing
In-store execution is still key. However, the eCommerce and digital marketing is becoming more important. Consumer in China spend a lot of time collecting brand and product information online.
As well, the eCommerce is rapid growing. More and more luxury brands set up their Chinese eCommerce. You can also find more detail information from our former article, 10 Steps for Successful eCommerce in China.
We are looking forward to hearing your opinion and questions. Feel free to contact us.
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