Attitudes towards Luxury - China - July 2019

OVERVIEW
What you need to know
Covered in this report
Definition
EXECUTIVE SUMMARY
The market
The consumer
Buying luxury more for themselves rather than for others
Figure 1: Luxury buyers, June 2016, February 2017 and April 2019
Luxury beauty outperforms, fashion clothing and jewellery remain popular
Figure 2: Luxury products or services bought, February 2019
Department stores are losing favour
Figure 3: Purchase channel of luxury products, April 2019
Willing to pay for big luxury brand names
Figure 4: Reasons to buy luxury jewellery or timepieces, April 2019
Cartier takes the lead in hard luxury
Figure 5: Popular hard luxury brands of jewellery or timepieces buyers, April 2019
Second-hand luxury market is just starting out
Figure 6: Attitude towards second-hand luxury, April 2019
What we think
ISSUES AND INSIGHTS
Luxury is no longer about social status and material possessions
The facts
The implications
Figure 7: Streetwear elements and design in luxury brands
Modern luxury is more approachable and inviting
The facts
The implications
Luxury jewellery and watch brands under threat from high fashion brands
The facts
The implications
Figure 8: Price of channel and tiffany & Co.’s earrings, June 2019
MARKET OVERVIEW
Positive outlook for luxury market in China
Sales of major luxury conglomerates and brands
LVMH
Kering
Richemont
Swatch Group
Hermès
Prada Group
Tiffany & Co.
MARKET FACTORS
Rich population is growing fast
Figure 9: High-net-worth individuals in china, 2008-2017
Tax and regulations to boost domestic consumption
Travel and luxury shopping remain popular
Online channel opens up new possibilities
LUXURY MARKETING
Interactive WeChat to better connect with consumers
Tell the history and story of luxury brands
Collaboration and pop-ups to grab attention
Figure 10: Dior X KAWS SKP pop-up store at Beijing SKP
Culture sells but better understanding of the subtlety and nuances of Chinese culture needed
Figure 11: Ad campaigns of Dolce & Gabbana and Burberry
Figure 12: Miu Miu Club Shanghai, November 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Men catch up in luxury purchase
Post-80s are more into luxury purchase, while post-90s have great potential
Brand physical stores still dominate luxury market
Famous luxury brands take all
European luxury still leads the brands list
Demanding more customised luxury
LUXURY BUYERS
Luxury consumption remains strong in China
Figure 13: Luxury buyers, June 2016, February 2017 and April 2019
Luxury is no longer reserved for the rich
Figure 14: Luxury buyers, by monthly personal income, April 2019
Watch out for self-indulgent young luxury shoppers
Figure 15: Luxury buyers, by generation, April 2019
Young men have great potential in luxury
Figure 16: Luxury buyers, by gender, June 2016, February 2017 and April 2019
Consumers in South and Mid-west are attracted to luxury
Figure 17: Luxury buyers, by region, February 2017 and April 2019
Civil servants are becoming open-minded on luxury
Figure 18: Luxury buyers, by company type, February 2017 and April 2019
ITEMS PURCHASED
Beauty leads in luxury goods purchase
Figure 19: Luxury products or services bought, February 2019
Home products might be the next star in luxury
Hard luxury is giving way to the small indulgences
Figure 20: Luxury products or services bought, June 2016 and April 2019
High income consumers want luxurious aura both at home and on the road
Figure 21: Luxury products or services bought, by monthly personal income, April 2019
Women buy more in all luxury categories
Figure 22: Luxury products or services bought, by gender, April 2019
Post-90s fancy beauty products and jewellery
PURCHASE CHANNEL
Offline brand store is a must
Figure 23: Purchase channel of luxury products, April 2019
Jewellers and timepieces should consider investing in omni-channel
Figure 24: Purchase channel of luxury products, April 2019
Plenty of room to grow for official retail channels
Figure 25: Purchase channel of luxury products, April 2019
WeChat applets on the rise
Figure 26: Purchase channel of luxury products, WeChat applet, by monthly personal income, April 2019
High earners also purchase more on the online channel
Figure 27: Purchase channel of luxury products, online channel, by monthly personal income, April 2019
PURCHASE INFLUENCERS 
Jewellery and timepieces
Brand name and craftsmanship are most important
Figure 28: Reasons to buy luxury jewellery or timepieces, April 2019
Craftsmanship is more effective in driving jewellery purchase than in timepieces
Men are more interested in brand history and techniques
Figure 29: Reasons to buy luxury jewellery or timepieces, by gender, April 2019
Investment value drives hard luxury purchase
Figure 30: Reasons to buy luxury jewellery or timepieces, by generation, April 2019
Figure 31: Reasons to buy luxury jewellery or timepieces, by monthly personal income, April 2019
Impact of other demographics on reasons to purchase hard luxury
Fashion products
Brand history does not really sell in luxury fashion
Figure 32: Reasons to buy luxury fashion products, April 2019
Figure 33: Rank of purchase influencers of fashion products and jewellery/timepieces, April 2019
Unique design remains the key to appeal to younger consumers
Figure 34: Reasons to buy luxury fashion products, by generation, April 2019
Tier-one-city consumers delve into the raw materials used
JEWELLERY AND WATCH BRANDS LAST BOUGHT
Cartier dominates hard luxury market
Figure 35: Hard luxury brands last bought, mentioned by more than 1% of jewellery or timepieces buyers, April 2019
European luxury brands are sought-after in China
Figure 36: Origin of the hard luxury brands last bought, by brand origin, April 2019
Chinese jewellers start to break into luxury jewellery list
Men’s interest in technical specifications reflects brand preference in hard luxury
Strengths and weaknesses of hard luxury brands
Figure 37: Purchase influencers of luxury jewellery or timepieces, by brand last bought, selected brands, April 2019
Cartier
Tiffany & Co.
CHANEL
ROLEX
GUCCI
BVLGARI
Longines
Chow Tai Fook
LUXURY PURCHASE TRENDS
Buying luxury is new normal
Figure 38: Necessity of luxury in life, February 2017 and April 2019
Luxury shoppers are open to luxury products and luxury experiences
Figure 39: Interest in luxury branded products vs luxurious experiences, February 2017 and April 2019
Figure 40: Interest in luxury branded products vs luxurious experiences, by whether have bought luxury products or services in the past 18 months, February 2017 and April 2019
Niche luxury brands are losing their mojo
Figure 41: Preference for brand type, February 2017 and April 2019
Figure 42: Reasons to buy hard luxury and luxury fashion products, by brand recognition preference, April 2019
Figure 43: Brunello Cucinelli and Liu Tao
Still a long way to go for second-hand/vintage luxury in China
Figure 44: Acceptance of second-hand luxury, April 2019
Figure 45: Acceptance of second-hand luxury, by monthly personal income, April 2019
Customisation in luxury will be the next trend
Figure 46: Attitude towards customisation, February 2017 and April 2019
Figure 47: Attitude towards customisation, by city tier, February 2017 and April 2019
Figure 48: Attitude towards customisation options, April 2019
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations