China'S Luxury Market Is On The Rebound

According to the world clothing and shoe net, after three years of deceleration, Chinese individuals

Consumption rebounded in the third quarter of 2016 and grew strongly in 2017.

Luxury goods in China

The bain report shows that in 2017, China's luxury goods sales reached RMB 142 billion, representing an increase of about 20% compared with 2016, the biggest increase since 2011.

Government departments have further promoted domestic consumption, strengthened control over purchasing agents, and the top luxury brands have begun to actively adjust the price gap between domestic and foreign markets, which has become the main driver of the mainland's luxury market rebound.

China's "trench" carries luxury "half sky"

China's GDP continues to grow, and consumption drives more and more strongly, especially with the growth of online retailing.

Meanwhile, Nielsen consumer confidence index shows that China's consumer confidence index has been higher than the global average for four consecutive years.

According to data from Bain and Italy luxury goods association, sales of luxury goods hit a new high in 2017, reaching 1 trillion and 200 billion euros, and more importantly, the Chinese contributed 1/3 of them.

Statistics show that in 2017, the largest proportion of luxury goods sales in the world was luxury cars, reaching 489 billion euros, followed by clothing, leather, cosmetics, tidying up, jewelry and watches.

With the upgrading of consumption, more and more Chinese people travel to the developed countries. As of August 2017, Chinese tourists' personal travel visas for Italy increased by more than 22%, and visa applications exceeded 300 thousand.

Thanks to the spurt growth of tourism in Europe, Chinese tourists directly increased sales of European traditional luxury goods by 6 percentage points to 87 billion euros.

The purchasing power of Chinese tourists is much higher than that of other countries.

From the sales channels of luxury goods, franchised stores, agent sales and

Shopping malls still play a leading role in the sale of luxury goods. Chinese tourists are the biggest consumers in this field.

In addition, more than half of consumers said they would be willing to spend more on online shopping.

The new darling of the luxury industry -- "millennial generation"

Internationally, there is a special intergenerational term, "millennial generation" (1984-2000 birth), which refers to the generation who arrived in twentieth Century and reached the age of adulthood after entering the twenty-first Century (2000).

This group of people is full of personality, clear about their needs, yearning for freedom and being well versed in social media.

According to a study by Deutsche Bank in Italy consulting firm Pambianco, the millennial generation has become the main consumer of luxury goods, and there are about 200 million such groups in China.

Pambianco's report shows that the global luxury industry's total revenue in 2017 is expected to reach 250 billion euros.

Among them, the millennial generation has become the main force of luxury consumption, and the proportion of this group will reach 40% in the next 5-7 years.

The millennial generation is very familiar with digital technology and has a deeper understanding of luxury products.

They are more interested in "fashion", "street leisure", "trendy" and "seasonal" products. The frequency of purchase is more frequent, but the price is relatively low.

They want to show their unique personalities through different appearances.

The behavior of the millennial generation is the result of the operation of the market, and it is also the cause. The report shows that the sales of luxury goods on the online channel have maintained a high growth rate, which is faster than the overall growth rate of the domestic market, but the overall sales share is still relatively low, about 9%.

Relative to the cosmetics online penetration can reach 15% to 20%, the overall luxury online penetration is still low.

Many luxury brands have begun to adjust their layout as well. According to statistics, many of the top 20 brands have adopted the strategy of "closing small stores and opening large stores".

Paying attention to quality and ignoring price seems to be the label of the millennial generation. Social media has replaced traditional media as the main carrier of luxury goods.

According to the survey data, over 25% of the 90's of the millennial generation have purchased luxuries.

The most popular luxury brands of the millennial generation are Dior, Prada, Gucci and Coach. These young Chinese shoppers are also the largest group of Chinese outbound tourists who contribute most to market growth, accounting for 50% of the total number of Chinese outbound shoppers.

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Luxury cards' anxiety disorders'

Facing the menacing of the millennial generation, all luxury brands have racked their brains to cater for their preferences. The choice of young traffic stars has become standard. Michael Kors chose Yang Mi, Burberry chose Wu Yifan and Bally chose Tang Yan. Behind the appointment of celebrity spokesperson and ambassador, in fact, it is also a battle between luxury brands and young consumers.

A lot of "hundred years old shop" has suddenly been so "grounded" in the past two years. It also reflects the anxiety of luxury brands.

However, finding celebrity endorsements is not a panacea. There are also many failures in the industry. Sometimes, they are too aggressive.

Worse still, luxury brand decision makers are increasingly unable to understand young people's preferences.

The millennials want to show their individuality instead of showing off, which is a difficult problem for traditional luxury goods. This is why the major brands in recent years are constantly absorbing young designers and more innovative ideas.

It is a key first step to firmly grasp the millennial generation and know their preferences.

According to Bain, the generation born in the millennial generation and after 2000 will occupy nearly half of the world's personal luxury goods by 2025. This generation and parents have different ideas.

For luxury companies, it is both an opportunity and a challenge, because building a luxury brand requires enough time and patience, how to put the achievements and profits first and grasp the future before we can cure the root.

With the rise of the Internet market, especially the Chinese habit of online shopping, new opportunities have been created for luxury goods manufacturers.

More and more luxury goods companies are setting up online stores to directly face customers and expand market sales area and space.

According to statistics, the traditional marketing revenue of luxury goods accounted for 70% of the total sales in 2017, while network marketing was crossing the threshold of 30%.

Arrogant luxury cards finally bow to the electricity supplier.

Once arrogant luxury brands, now also have to lay down their body, from the line to the line.

In order to curry favor with Chinese consumers and cater to the market, luxury brands have tried to switch to e-commerce and stay at Tmall, Jingdong and other e-commerce platforms.

Nowadays, how to attract more consumers through online platforms has become the top concern of luxury brands.

Facts have proved that more and more luxury brands are stationed in the domestic electricity supplier, and are actively catering to the new ways of domestic electricity suppliers, because luxury brands see the great vitality of the electricity supplier in the Chinese market, which is the main reason for them to put aside their "reserve".

For luxury brands, the future direction of China's market is the integration of online and offline businesses.

Chinese consumers' demand for luxury goods has been blowout in recent years.

In the past, Chinese people wanted to buy luxury goods, they had to bear a higher price than foreign countries, or went abroad to buy, but now domestic electricity suppliers can buy cheaper luxuries than domestic counters. This is a win-win situation, consumers spend less money to buy goods, luxury goods companies are also pforming from electricity providers to younger ones.

On the contrary, looking at the offline situation of luxury brands, many brands have experienced the negative growth of online stores in recent years. Among the top five hundred companies in the world in 2017, only a luxury jewelry brand of Dior came in, ranking only 234.

But the purchasing power of Chinese consumers is increasing at an alarming rate. Luxury consumption is also rising. The fastest growth rate in 2017 is in Asia and Europe. The Chinese have contributed 1/3 of the total consumption.

Because of this, the luxury brands all over the world pay more and more attention to the Chinese market.

The electricity supplier is a sunny road to further open up China's luxury market. This is also the biggest difference between China and other developed countries.

In China, where electricity providers are unusually developed, luxury consumption is not limited to one or second tier cities. Even the three or four tier cities have shown strong consumption power.

The aging of many famous luxury brands has caused Chinese consumers to "luxury fatigue".

Compared with luxury goods, small and unique products are more popular among young consumers.

Conclusion

The Jingdong Data Research Institute recently released the "2017 online luxury consumer insight report", pointing out the four major trends in the development of luxury goods industry:

First, the "user group is young and upstart", and the consumption capacity will be improved. Young consumers will also receive more attention.

The two is "brand extension". Consumers are no longer just pursuing big brands.

The three is the "urban exploration". The consumption desire and ability of the two or three tier cities are increasing and the potential for development is huge.

Four is "cross-border cooperation", there are a number of front-line brands to start cross-border cooperation, to bring more fresh consumers, such a trend will continue to continue.

For the 2018 luxury market trend, China's luxury market is expected to maintain strong momentum under the stimulation of millennial consumer driven and complementary online and offline marketing to the flow of physical store customers.

However, in view of the rapid growth in 2017, the growth rate in 2018 will be moderated.

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