Cutting through in the Chinese luxury market

16 Jul 2015|Added Value

Burberry reported a further decline in their Hong Kong revenue yesterday, while other markets are thriving.  This is a sign of the shifts in luxury consumerism in the Chinese market. There is a move away from British designers and instead Asian designers from China, Taiwan, and particularly Korea are becoming more trendy. Consumers are embracing a sense of pride in being Asian. With a rise in boutique designers who understand their shape and style, as one luxury consumer put it; “nobody understands Asians like other Asians”.

In a wider cultural shift in the Chinese luxury market we have seen a move towards local cultural confidence, sophistication, minimalism, and natural appreciation, and away from western provenance and tradition. Burberry has likely been a victim of that shift. To find growth in the changing market the likes of Burberry will need to understand the new cultural drivers and authentically embrace these desires from Chinese consumers in their offer.

There is still significant growth potential for luxury brands that still exists with Chinese consumers. It’s about moving ‘beyond bling’ and tapping into their rapidly evolving tastes. There are more opportunities to connect with luxury consumers, particularly online as luxury consumers become more digitally savvy. There’s rapid growth of internet sophistication and mobile internet usage, with 81% of Chinese millionaires using WeChat more than 5 times a day. They also regularly travel abroad and spend money on luxury brands. Chinese visitors accounted for 27% of all tax free shopping globally in 2013 – the biggest spenders in the world. But increasingly they’re looking for something beyond a luxury shopping experience.

We’ve identified 5 key drivers shaping the Chinese luxury consumption:

  1. increasing internet exposure
  2. cultural confidence and optimism
  3. nature as luxury
  4. re-appreciation of the real
  5. sophistication with a discerning eye

So what are the secrets of winning in the Chinese luxury market? To tap into these cultural drivers brands will need to understand local cultural desires. Growth will be found in fusing tradition with modernity, authenticity and ideal representations, embracing naturalism, understanding minimalism and the ART of luxury, and finally giving consumers experiences that feed into these desires.


To read more about these cultural shifts (Chinese and English) click here.

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