According to research compiled by L2, China’s luxury market is about to explode.
Interesting to note is the age groups of luxury buyers. China’s unique historical circumstances come into play, with 80% of luxury buyers under the age of 45. This makes luxury branding in China require a distinctly “young/modern” feel vs. the US and Japan.
With such large potential looming in the near future, luxury brands are beginning to enter the market in force. Whether they will succeed will be a careful balance between their brand values, Chinese taste, and their ability to localize their message and cost effectively communicate that message to Chinese audiences.
We can expect digital campaigns to be a large part of luxury brands entrance into China; we’ve seen evidence of this already from Lancome, Porsche, BMW and others.
China’s Luxury Market: 840 Million Potential Customers. http://bit.ly/bRkUGP
This is an interesting visual presentation of the figures – more engaging than the way it was presented in the McKinsey research report.
Ya, funny what a little time and effort designing data can do for its impact.
The first two stats are important, but don’t conflate the growth in internet users with the growth in the luxury market. Sure, China is a huge and important luxury market, but that bump of roughly 500 million going online in the next few years includes vast numbers of China’s working poor. And just because a migrant worker can now get online it doesn’t mean he’s eager to hop down to the nearest luxury mall and blow ten years’ worth of salary on a LV bag or Omega watch.
I think it depends on how you define “luxury”, it isn’t necessarily equated to “expensive”; but rather are goods you will buy as your income grows. Now of course these goods are more expensive then their original cheaper counterparts, but in a sense we should not measure objective price, but rather percentage of income the product takes up; ie: as income grows, purchase % may stay the same for similar categories as consumers trade up in products.
For instance, liquor in China; if you go for basic rice wine you can get it for RMB 2 (about USD 0.30). As your income grows, then maybe you go for the RMB 10 bottle instead (about USD 1.47). That RMB 10 bottle is considered luxury, as is later on when they move up to Bacardi, Absolut, etc.
This also applies to beauty, skincare, etc – daily life products. And of course cars, purses, which are bigger more visible purchases. Luxury in China is defined similar to the west (products bought as income grows), but products purchased needs to be adjusted for China income.
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RT @littleredbook: China’s Luxury Market: 840 Million Potential Customers. http://bit.ly/idKZnI
RT @littleredbook: China’s Luxury Market: 840 Million Potential Customers. http://t.co/l4fBYXpL
Comment on China’s Luxury Market: 840 Million Potential Customers. by Nathalie Omori http://t.co/rVUlxc8Y