Comprehensive Analysis: 5 Trends Of China'S Luxury Market In 2014

China's luxury market is no longer confined to China's borders. Chinese customers are more keen on tourism and closer ties with the world than ever before.

Tariffs are imported, and the price of imported luxury goods is much higher than that of their native countries. Luxury consumers in China can buy quality goods through many other ways.

When they go abroad, Chinese consumers are not only in luxury stores, shopping malls and shopping centers where they visit.

Displaying strong consumption power, they are also impressive in the way of shopping and duty free shops.

According to the Nielsen survey of luxury tourists released in October, the duty-free shops in the airport are almost as popular as boutiques: the former 24% and the latter 26%.

Meanwhile, a report released in June on duty free service Global Blue found that Chinese customers account for 27% of all duty-free shopping pactions.

The advantages of Hongkong's geographical location and zero tariff are faced with anti mainland and political struggles this year, so Chinese consumers have chosen other shopping destinations nearby, such as Korea, Taiwan and Japan.

Ruder Finn's survey found that tourism is the ultimate luxury of wealthy Chinese consumers. They say they will probably spend more money on their journey than luxury.

Perhaps the situation that Chinese consumers once got together to grab foreign luxury goods would gradually decrease.

Those who do not have time to travel may have friends or family members who travel to help bring things, or they turn to "gray market": buying goods, looking for goods in Taobao and WeChat businesses with relatively good reputation.

Although China's growing middle class is most concerned about prices, money is not a problem for many wealthy Chinese luxury consumers.

At the beginning of this month, the Ruder Finn survey of luxury consumption in China was released. They preferred to shop abroad because they found better choices and services in mainland China.

This year's China

The market has successfully gone out: the introduction of new international payment solutions, such as Alipay's EPASS and Asia Checkout, means that Chinese consumers can buy from international websites and wait for goods to be delivered to their homes.

International retailers can send goods to the center for customs clearance and eventually ship to China.

Although this means that the price is higher than the purchase on Taobao, but because of the quality assurance, many customers are willing to pay.

Gucci blamed weak performance on the overall slide in luxury consumption, but Reuters commentators believe that it should also blame itself.

There are indications that it is time for Gucci to change strategy and replace fresh blood for management.

Growth of the "new normal" domestic market

As more and more Chinese consumers go abroad, and the Chinese government is continuing the struggle against corruption, China's luxury market growth slowed to minus 1% in 2014, according to global consultancy Bain & Company.

This marks a continuation of the trend of slowing economic growth last year, with two digit growth in the ten years before the start of the anti-corruption campaign, which is now 2.5%.

Brands should not panic.

According to Euromonitor, Chinese consumers have made great contributions to global economic growth. In 2019, China's revenue growth is still expected to surpass Japan and become the second largest luxury market in the world.

Many Chinese consumers have to go abroad to Harold department store, founded in 1834, was once "Forbes" magazine as the world's best shopping malls and the most valuable department stores.

High demand for individualism

This year's slowdown in China's luxury goods industry is affected by the strong demand of mature and affluent consumers on unique experiential luxury goods.

Ruder Finn's survey found that tourism is the ultimate luxury of wealthy Chinese consumers. They say they will probably spend more money on their journey than luxury.

The interest in luxury experience is on the rise: in February, a survey conducted by the Boston consulting group found that 29% of Chinese consumers said they preferred "rich knowledge".

Chinese consumers are becoming more and more interested in the unique travel experience, including Antarctic expedition, African tour, customized VIP package, front row seats in New York fashion week or intimate contact with sports stars.

When it comes to luxury goods, Chinese consumers have shown preference for buying unique products, local tourism products, custom goods and collectibles, such as interest in art and antiques.

According to the results of many surveys conducted throughout the year, it is pointed out that interest in signs and obvious display of wealth in China and around the world has declined, and quality, exclusiveness and authenticity have become the key reasons for Chinese consumers to pay for luxury goods.

In April 23rd this year, the Royal Royal brand Burberry, which was founded in 1856, officially entered Tmall. However, the website sales showed that Tmall's official website only sold 132 items in 18 days, of which 32 products were unconditionally returned by customers, and the return rate was 26.4%, much higher than that of Tmall's return rate of such commodities.

LOGO reduction to prevent overexposure of luxury goods into Tmall

With the slowdown in China's luxury goods market, some brands have been worst hit: big brands, such as Louis Vuitton and Gucci, have slowed down, and Chinese consumers are far away from jewels.

Over the past ten years, the brand that has been widely popularized in China has been afflicted. Over the past year, efforts have been made to prevent overexposure.

Gucci regards restrictions as an important strategy for overuse of products. In 2014, luxury brands especially aimed at China's huge counterfeit luxury market.

Most of the counterfeit campaigns took place online. Alibaba's huge e-commerce website Taobao and Tmall brands have adopted some key strategies.

Some have taken a more controversial line: Gucci's parent company, Kai Yun group, has chosen to file a lawsuit against Alibaba, saying that it allows the fakes to be sold on the website, and Alibaba acts quickly as an e-commerce giant. Alibaba hopes that this will enhance its image to facilitate the listing of IPO in the us.

At the same time, luxury brands in Britain, Italy and France benefit from agreements signed by Alibaba and the Sino British Business Council, the Ministry of economic development of Italy and the Ministry of foreign affairs of France, in order to promote the brand of every country and crack down on counterfeit goods.

However, the most direct way is Burberry, with its "if you can't beat them, join them" strategy.

The branding of the British brand in April has become the only luxury brand in the luxury goods industry Alibaba Tmall.

Although some experts believe that this will dilute the brand image, the new store has expanded its brand influence. Alibaba has deleted a large number of counterfeit Burberry products.

Burberry's debut in Tmall means that this classic brand is slowly and forcefully continuing to crack down on counterfeit goods in their way.

Many luxury brands have launched the official WeChat public number, regularly promoting their brand's historical story and latest single product information.

More like FENDI brand, interact with fans, regularly hold guessing activities to deliver bags.

Chinese luxury consumers love mobile consumption

According to data released by China Internet Network Information Center in July, Chinese consumers use mobile devices more frequently than computers.

This development has provided a precondition for luxury brands to have a significant impact on social marketing, e-commerce and even retail sales.

The development of mobile apps in China is closely related to the increasing popularity of WeChat in mobile communications applications. This year marks the record of active users in 468 million months.

The rapid rise of the application has become China's largest mobile communication website. Many luxury brands have scrambled to establish their official accounts in WeChat.

The dominance of mobile Internet also has a huge impact on online luxury shopping.

A survey released by marketing agency DigitasLBi in April found that 70% of Chinese respondents had shoped through smartphones in the past three months.

Although many high-end brands are vigilant against e-commerce and mobile e-commerce, they worry that customers will miss the store experience, but those who are actively involved in mobile commerce have already tasted the sweetness.

For example, the sales volume of 40% of luxury e-business website is from mobile devices, and it is expected that this proportion will continue to grow in the next few years.

Mobile devices are also critical to store shoppers.

Many Chinese consumers use mobile phones abroad to communicate with family members and friends who want them to help buy luxury goods.

The DigitasLBi survey also found that smart Chinese consumers often take pictures with smartphones in stores or contact products in stores, and buy them online after comparing prices.

In fact, 84% of Chinese consumers do this. The use of mobile phones has become an integral part of China's shopping experience in 2014.