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Consumer Attitudes towards Luxury - China - May 2017

OVERVIEW
What you need to know
Covered in this report
EXECUTIVE SUMMARY
The consumer
Desire to buy luxury is obvious (especially luxurious experiences), while hard luxury may confront slow growth
Figure 1: Attitude towards luxury, luxury branded items and luxurious experiences, February 2017
Figure 2: Likelihood to purchase luxury products across categories, February 2017
Brand values are not fully acknowledged
Figure 3: Attitude towards affordable or discount luxury branded items, February 2017
Figure 4: Word cloud of luxury brands that consumers have bought in the last 18 months, February 2017
Majority buy luxury for small happiness and indulgence
Figure 5: Luxury purchase occasions, February 2017
Figure 6: Top 10 emotions associated with luxury purchase, February 2017
Purchase preferences: well-known brands and products that are classic, authentic and beautifully designed
Figure 7: Preferences towards luxury brands and products, February 2017
Four types of consumers
Figure 8: Consumer segmentation based on their attitudes towards life, February 2017
What we think
ISSUES AND INSIGHTS
Evolvement of Chinese luxury consumers
The facts
The implications
Figure 9: Classification of luxury consumers and their needs
Selling luxury to two genders
The facts
The implications
Targeting young luxury consumers
The facts
The implications
Being approachable is absolutely necessary
The facts
The implications
THE CONSUMER – WHAT YOU NEED TO KNOW
Interest in different luxury categories is changing
Definition for ‘luxury’ has become loose
Emotion-driven marketing communications rule
ATTITUDES TOWARDS LUXURY CATEGORY
Only half of Chinese consumers are determined to buy luxury
Figure 10: Attitude towards luxury category, February 2017
Increased luxury purchasing is part of the Chinese consumption upgrade trend, rather than increasing luxury knowledge
Figure 11: Proportion of luxury buyers and non-buyers, by consumers holding different opinions towards luxury products, February 2017
Top-tier luxury names are more desired with less showy items in demand
LUXURY CONSUMERS
Role of income in increasing luxury purchase
Figure 12: Comparison of the number of buyers of luxury branded items in 2016 and 2017, February 2017 and June 2016
Figure 13: Buyers of luxury branded items, by monthly personal income, February 2017
Chinese luxury market is driven by consumers aged 25-39
Figure 14: Buyers of luxury branded items, by age, February 2017 and June 2016
The shift of luxury brand buyers from young towards mature females
Figure 15: Buyers of luxury branded items, by age and gender, February 2017 and June 2016
Women generally drive luxury markets more than men
Figure 16: Buyers of luxury branded items, by gender, February 2017 and June 2016
Females aged 20-24 have a different view on luxury
Consumers from middle and western China buy fewer luxury items
Figure 17: Buyers of luxury branded items, by region, February 2017
LIKELIHOOD TO PURCHASE LUXURY
Hard luxury is giving way to casual luxury
Figure 18: Likelihood to purchase luxury products across categories, February 2017
Electronics, the new luxury
Growing desire for luxurious lifestyle products
Figure 19: Likelihood to purchase selective luxurious experiences, February 2017
Figure 20: Interest in luxury branded products vs luxurious experiences, February 2017
High earners have special desire for home improvement and collection
Impact of demographic features on luxury category preferences
LUXURY BRANDS PURCHASE
Luxury is not exclusive to top-tier brands
Figure 21: Attitude towards luxury brand tier, February 2017
Consumers are not yet experts in luxury classification
Figure 22: Word cloud of luxury brands that consumers have bought in the last 18 months, February 2017
Chanel stays on top
Figure 23: Top 10 luxury brands that consumers have bought most recently in the last 18 months, February 2017
Local luxury brands are rising driven by consumer desire for value-for-money products
Brand preferences do exist across genders
LUXURY PURCHASE OCCASIONS
The main motivation to purchase luxury: pleasure and self-indulgences
Figure 24: Luxury purchase occasions, February 2017
Small items, as a causal token to my love
Men and women buy luxury for different reasons
Figure 25: Luxury purchase occasions, by gender, February 2017
Higher earners have more special occasions for luxury
Figure 26: Luxury purchase occasions, by monthly household income, February 2017
EMOTIONS ASSOCIATED WITH LUXURY
Less about superiority, more about self-improvement and satisfaction
Figure 27: Top 10 emotions associated with luxury purchase, February 2017
High price does not have the closest relationship with luxury
Use emotions to sell
Brand unique identity and exclusivity are somehow neglected
Marketing strategy needs to be adaptive to age differences
Figure 28: Different emotional association across ages, February 2017
Women want a pat on the back, while men seek status enhancer
Figure 29: Different emotional associations between men and women, February 2017
LUXURY PURCHASE TRENDS 
Most consumers prefer the widely-known luxury brands and products
Figure 30: Preferences towards luxury brands and products, February 2017
Figure 31: Preferences towards luxury brands and products, by luxury buyers and non-buyer, February 2017
Well-known and niche brand lovers buy luxury for different purposes
Figure 32: Differences of luxury purchase occasions between niche brand lovers and well-known brand lovers, February 2017
How to attract well-known and niche brand lovers?
Figure 33: Differences of luxury associations between niche brand lovers and well-known brand lovers, February 2017
Figure 34: Differences of luxury purchase beliefs between niche brand lovers and well-known brand lovers, February 2017
Figure 35: Differences of luxury purchase preferences between niche brand lovers and well-known brand lovers, February 2017
Increasing appreciation of product design and customisation
Figure 36: Preferences towards luxury features and customisation, February 2017
Seek smart ways to purchase luxury and a small number of consumers do consider replicas
Figure 37: Luxury purchase preferences, February 2017
Figure 38: Differences of luxury purchase occasions between two types of consumers, February 2017
Require more information and help during purchase
Figure 39: Luxury purchase decision-maker, February 2017
Online purchase is becoming a mainstream
Figure 40: Preferences towards luxury purchase channels, February 2017
CONSUMER SEGMENTATION
Four types of consumers
Figure 41: Consumer segmentation based on their attitudes towards life, February 2017
Explorers (探索者): positive-minded consumers who tend to say yes to every idea
Figure 42: Agreement (including strongly agree and somewhat agree) on selected statements about financial management, by consumer segment, December 2016
Figure 43: Agreement (including strongly agree and somewhat agree) on selected statements about life priority, by consumer segment, December 2016
Figure 44: Likelihood to purchase luxury, by consumer segment, December 2016
Figure 45: Emotions associated with luxury purchase, by consumer segment, December 2016
Figure 46: Agreement (including strongly agree and somewhat agree) on selected statements about lifestyle, by consumer segment, December 2016
Figure 47: Agreement (including strongly agree and somewhat agree) on selected statements about individuality and self-identity, by consumer segment, December 2016
Epicureans (享乐主义者): big spender devoted to sensual pleasures
Budget Controllers (预算控制者): make smart purchasing decisions, rather than being stingy
Sceptics (怀疑者): not entirely sure about their preferences and desires
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology

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