Chinese luxury market is leading the game! Can they be the game changer?
An Industry research report from media insight leader Tocanan reveals the Chinese luxury market segment has been expanding rapidly with brands like Gucci, Chanel, and Dior leading the game.
The report is based on extensive analysis of the e-commerce data, social media engagement and field research. The report is an eye-opener for brands that are planning to enter the Chinese market.
There has been a steady growth in the overall luxury segment which is inclusive of travel, personal goods, food, etc. The growth in the personal luxury market had been slowed down gradually since 2011 and stagnated for the first time after the 2016 financial setback. Chinese luxury consumption presents different data altogether as they lead the market recovery for the segment. Tocanan’s report on luxury industry research details out the various aspects of consumer behavior and strategy followed by numerous luxury brands to grow their market share in China.
According to the report, the top 5 luxury brands in the personal goods space are Chanel, Gucci, Dior, Saint Laurent (YSL), and Louis Vuitton (LV). Tocanan has dissected the data and analyzed each segment namely ready-to-wear, watches, jewelry, cosmetics, and handbags to get a clear understanding of the market share that the top 20 luxury brands had captured in China.
The leaders in the ready-to-wear segments included Gucci, Dior, LV, and Fendi. Approximately 72.9% of purchase decisions were made because of celebrity endorsements. In terms of popularity, ready to wear sub-category was most popular amongst the consumers at a whopping 44.2%.
Handbags were mostly purchased during the Chinese New-year. 2019 is the year of Pig, and all the top brands had hit the market with designs that reflect this belief. The top brands in this space were Chanel, Gucci, and LV.
Chanel, YSL, Dior, and Armani lead the space in the cosmetics segment. 67.5% of purchase decisions in this segment were made based on references made on social media platforms. In short, a friend acted as an influencer.
Watches were worn mostly to banquets. Cartier, Dior, Gucci held the highest market share in this sub-category. The key influencers were the celebrity and social media references from friends.
Gucci, Cartier, Tiffani, Bulgari were some of the brands that took the Chinese jewelry market. They were bought primarily for the social events and 62.5% of purchase decisions were made based on celebrity factor.
Chinese culture has great values for gifting which increased the tendency to shop on special occasions such as birthdays, anniversaries and festival seasons. The report says birthday was one of the important occasions which leverage around 31.8% of the sales in personal luxury goods. The holiday seasons and festivals like Lunar New Year lined up in second place with 28% of the sales growth in the Chinese luxury market.
Multi-touch and omnichannel retail growth were taking over the Chinese luxury market. Because of this digitalization, luxury websites started getting more potential targeted customers.
The report says, out of 56.1% of impressions made in social media, there were around 43.9% of the consumers were turned out to be potential buyers. This clearly says that Chinese consumers have a huge appetite for recognizable luxury products.
When it comes to popular brands in China, French luxury products topped the list and now it’s time for the other international brands to grab the market. To establish their brand in China, international luxury brands should now study deeply into the retail market in China to understand customer demands and expectations. In forthcoming years, it is expected that China will contribute around 40% of the global luxury market.
Take time to explore the dynamic luxury market and build a consistent approach for customer engagement!
