Luxury commerce and international tourism still very much revolve around two market segments – millennials and the Chinese consumer.
In actual fact, the Chinese consumer and the millennial generation remain the keys to future growth with the two overlapping to a large extent. With over 58% of Millennials living in Asia, essentially the Chinese millennials will make up a large component of shoppers and become an important driver of the growth in luxury.
Millennials are those born between the 1980s and early 2000s. Typically, they value experiences over tangible items and do not see purchases as achievements but the products they do purchase represent quality, craftsmanship and authenticity. Top luxury brands favoured by Chinese consumers include and and the purchasing decision is often triggered by items which are from a globally renowned brand, possess a timeless style and are innovatively designed.
The average number of luxury purchases from Chinese millennials was eight compared to five for other shoppers. These young Chinese millennials are also deemed “The Moonlight Clan” those who spend all their monthly salaries illustrating an economic departure from the spending habits of their parents’ generation which is known for its high savings rate.
2017 saw the sales of luxury goods in China jump lifted by Chinese millennials’ appetite for high priced cosmetics, fashion and jewellery.
As Chinese millennials have helped to accelerate luxury spending, luxury brands are repositioning themselves to reach this influential demographic. Nowadays, rarity is the new luxury and limited edition products are particularly sought after.
The most effective marketing methods are exclusive collaborations by relevant partners such as renowned and , and , secret and exclusive brand experiences such as in Shanghai, a one off event as an ongoing strategy to embrace the Chinese market, and a personalized online experience.
When it comes to an engaging online experience, millennials are a generation where social media is evolving as a deeply valuable source of both information and inspiration. In short, millennials have a hunger for constant knowledge and discovery and Chinese consumers are savvy and becoming smarter every day in the brands they choose to wear.
They follow KOL’s (Key Opinion Leaders) online, including Angelababy - the actress is the top star boosting luxury brands on for Dior, Gucci and Givenchy. Others include Ni Ni, a rising star in luxury brands for Tiffany and Gucci, and Li Yuchun, a Chinese singer who has signed with Coco-cola, L’Oreal and .
Even though and Weibo are obvious platforms for Chinese influencers to use, there are also new platforms which are gaining traction through live-streaming and photo sharing apps like NICE, Show, Meitu, Pic and Meipai. These show the live streaming of runway shows, new collections, styling sessions, vloggers and boutique tours. In recent years international brands have secured partnerships with leading Chinese celebrities and the role of ambassadors is becoming increasingly important for establishing, maintaining and promoting a brand’s image.
As the luxury world is changing fundamentally, brands need a new story to tell, and a personalized way to tell that story is absolutely essential. That story could be a new collaboration or an amazing in-store experience and both can be deployed to elevate the relationship between the brand and the consumer to new heights.