Analysis Of Consumption Situation Of China'S Luxury Market In 2018

The global luxury market in 2018 was about $347 billion.

According to the world clothing shoes and hats net, 2018

The market is about US $347 billion. Despite the global economic slowdown, sudden political events and the Sino US trade war, the global luxury goods

Still recorded a growth of 12%, which includes e-commerce business, advanced customization business, and the traditional high-end niche that has been revitalized in recent two years.

Business growth.

In 2018, Chinese luxury goods nearly $1 trillion, online luxury sales surged, and the millennial generation is not the future of luxury brands.

In 2018, the Chinese bought 145 billion 700 million dollars of luxury goods, and 74% of the purchases occurred overseas.

According to the statistical analysis of market demand and investment forecast analysis of China's luxury goods industry released by the foresight Industry Research Institute, in 2018, Chinese luxury goods consumption reached 145 billion 700 million US dollars, an increase of 7%, accounting for 42% of the global luxury goods market.

Among them, the consumption of luxury goods abroad is 107 billion 300 million US dollars, the growth rate is 4%, the total domestic consumption is 38 billion 400 million US dollars, the growth rate is 17%, the consumption outflow is still very serious, and 74% of the luxury purchases happen outside China.

How to make the consumption of high net worth people return is the key to stimulating domestic demand, boosting domestic consumption market and promoting quality consumption.

Global luxury consumption statistics and growth in 2011-2018 years

Source: Prospect Industry Research Institute

Statistics and growth of luxury consumption for overseas Chinese in 2011-2018 years

Source: Prospect Industry Research Institute

Statistics and growth of luxury consumption in China during the past 2011-2018 years

Source: Prospect Industry Research Institute

Analysis of consumption situation of China's luxury market in 2018

China's domestic luxury goods market accounted for 11% of the global luxury market, a percentage point higher than that of 2017, and the trend of consumer market warming in China is obvious. However, because of the housing market downturn, the stock market is not good, the unemployment rate has increased and other reasons, Chinese consumer confidence has been seriously affected, and the consumption power of luxury goods has obviously weakened in the second half of 2018.

At present, Chinese consumers' luxury purchasing power is mainly concentrated on more than ten million assets consumers, accounting for about 4000000 of the 3/1000 of the population. China's "customers" (more than ten million asset accounts for short) contributed 60% of the total Chinese luxury consumption in 2018, totaling 87 billion 400 million dollars.

Chinese customers prefer overseas shopping. In 2018, they spent more than 75 billion dollars in luxury goods outside China, accounting for 70% of Chinese consumers' luxury consumption abroad, and altogether purchased about 12 billion 400 million dollars of luxuries in China, accounting for 32% of the domestic luxury consumption market.

Therefore, how to make the consumption of high net worth people return is the key point to stimulate domestic demand, boost domestic consumption market and promote quality consumption.

Although Chinese consumers are still the dominant force in the global luxury market for a long time, the brand structure of the luxury goods industry will change to the trend of brand multi polarization in the future. The relative advantages of traditional luxury brands and luxury goods groups still exist, but the market share will be affected.

International large-scale Internet platforms, such as Alibaba and Amazon, such as Facebook and Tencent, will also directly share or hold a certain number of luxury brands.

China's capital will also become an important force in the global luxury market with the help of a huge Chinese consumer market, and mergers and acquisitions among luxury goods groups will also intensify.

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Luxury online sales reached 36 billion yuan in 2018, an increase of 37% over 2017.

In 2018, according to the survey of 2750 prospective customers, the proportion of high-end consumers willing to purchase online luxury goods increased from 27% in 2013 to 27%. The main concerns of online shopping were fake (79%), experience (43%) and service (27%).

It is predicted that with the increasing standardization of the Internet shopping environment, the popularity of all kinds of official online sales channels of luxury brands, especially the rise of the luxury shopping models of various members, will greatly solve the problem of trust. The proportion of people willing to purchase luxury goods online will increase to more than 80% in 3-5 years.

In 2018, China's luxury online sales turnover reached a record $5 billion 300 million, about 36 billion, an increase of about 37% over the 2017 US $3 billion 900 million, and it has developed very rapidly, and has accounted for nearly 14% of the sales of luxury goods in China.

The report predicts that 2019 will be a year of explosive growth of luxury goods business. The state will introduce various luxury e-commerce incentive policies. It is estimated that in 2019, China's luxury online consumption capacity will have an opportunity to exceed 50 billion.

With the rise of luxury online consumption, how to get online and offline to enhance trust and sense of experience on line, making the convenience and selectivity of online enhanced lines become a new topic of many brands. In 2018, nearly 90% of luxury brands tried on the Internet of stores, mainly focusing on new products on the Internet, appointments to stores and publishing activities.

By the end of 2018, there were more than more than 400 outlets of over 90 first-line brands entering the luxury third party VIP customer service platform.

In 2018, the global luxury brands opened and closed around the world, while the shops focused on new markets and emerging cities where brands did not enter, while stores concentrated in mature and economically developed cities.

It is predicted that from 2019, "one city, one store" will become a brand expansion strategy for many brands, that is, a city should close its extra stores and establish a super large flagship experience center, which is not only a product display and Exhibition Center, but also a custom center, an activity center and a customer service center. These stores can build more and more close customer relationships with online customers, and achieve multi frequency and multi angle interaction with customers.

According to the report analysis, the Internet and AI will definitely restructure the luxury retail industry in the future, but big data will become the main driving force for the new retail pformation of luxury goods, and will provide a quality upgrading scheme based on consumption upgrading.

The experience scene will be moved from offline to online based on artificial intelligence technology, and gradually realize the online based experience mode. The boundaries between online and offline will become increasingly unclear. The future new retail will be a multi-dimensional multi scenario retail mode based on big data driven and Internet and artificial intelligence as the means.

At present, more and more luxury brands are in the Chinese market and quickly seize the young market in order to cultivate potential customers.

It is predicted that the development of all luxury brands will obviously slow down in 2019. Chinese consumers will continue to dominate the global luxury consumption. With the help of capital integration and Internet platform, the consumption of luxury goods by Chinese consumers will exceed overseas consumption in about 5-10 years.

The millennial generation is not the future of luxury brands.

The report divides luxury consumers into three categories: core consumers, marginal consumers and potential consumers.

The core consumer is a customer who has a certain wealth base and regards luxuries as necessities and has a strong luxury consumption ability. At present, such customers have about 4000000 people in China and assets over 10 million, which contributes about 60% of the consumption volume of luxury goods, and has a specific appellation called "customers."

The customer group will continue to be the dominant force in the luxury market in the future.

Marginal consumers refer to having a certain ability to consume, but luxury goods are still luxury for them. This group has about 70000000 people in China. They may buy one or several luxuries a year, or they may not buy a luxury item for a few years.

In fact, they are still quite a distance from the international standard of middle class.

With the intensification of China's "go middle" process, a small number of people in this group will become the core consumers of luxury brands through entrepreneurship and so on. Most of them will be faced with a sharp decline in consumption and become an inactive marginal consumer, or fall into the potential consumers of luxury goods.

The potential consumers of luxury goods refer to those who are unable to consume luxury goods or consume luxury goods, which is a burden and pressure to them, but it does not mean that they are absolutely impossible to buy luxury goods.

In recent years, the loss of core consumers is the great pressure faced by almost all luxury brands. In order to alleviate the pressure brought by the loss of core consumers, luxury brands attract consumers from marginal consumers and potential consumers through the brand popularization, product diversification, developing low-priced products and discount in disguised form, while losing a core customer while maintaining sales growth by acquiring three marginal customers and potential customers. On the surface, the number of customers is increasing and sales have not decreased. In fact, brands are facing great risks, because core consumers have a clear exemplary role in the other two categories of consumers.

Most of the millennial consumers who have high hopes for luxury brands are marginal consumers. They are large, flexible, minded, easy to accept new things and dare to spend ahead of time. But there are several points to be ignored.

1, most of the millennial generation is a gnawing member of the developed city standard. They do not possess strong wealth creation ability.

2, at present, China's millennial generation is generally in debt, and all kinds of micro credit loans involve almost every millennial generation.

3, mortgage loans and children's education have become the three great mountains of the millennial generation.

4, the majority of the millennials are wage earners. Under the impact of the Internet and artificial intelligence, most of them will face unemployment risk.

5, the millennial generation is good at spending money, but not good at managing money. There are few deposits in the millennial generation, even though deposits are also very small.

6, millennial generation is easy to accept new things and new brands, but loyalty is not high.

7, although the millennial generation is keen on luxury goods, it is a price sensitive group.

To sum up, the millennial generation's spending power is not sustainable, and the millennial customers will not belong to any brand. They are extremely unfaithful. There is a great risk to the millennial generation. The report believes that the millennials are likely to be the beat generation, and the millennial generation is not the future of luxury brands.

At present, all luxury brands are faced with two choices in terms of customer positioning: one is to maintain the high profile of luxury goods, aiming at a small number of customers.

One is to actively or passively popularized the trend, and become the high-end consumer goods. The front is doing business of a few people, but the market share is not small, but most people's business is large, but the share is not large, each has its advantages and disadvantages.

But the risk of the latter is that with the gradual development of various industries and the further development of artificial intelligence, the unemployment of most people will become an indisputable fact. At this time, the consumption power of mass consumers will be further reduced, and their consumption power of luxury goods will also be exhausted.

Six major trends of global luxury industry in 2019

1, the coming of high tide of luxury brand sale and purchase will lead to a wide range of brand mergers and acquisitions in 2019. There may be mergers and acquisitions between several luxury groups. The world-renowned Internet platform will actively participate in the investment and acquisition of luxury brands or luxury brands.

2, from 2019, the development of all luxury brands will obviously slow down, brand premium capability will further reduce, customer loyalty will be further reduced, product innovation will become the core competitiveness of all brands, and all brand product R & D budgets will be greatly improved.

3, the brand new high-end lifestyle brand will usher in a great opportunity to expand rapidly with the help of the Internet platform and seize the market share of traditional luxury brands.

4, the product gap and price gap between traditional luxury brands and popular brands will be further reduced, and the era of luxury brand popularity will come.

5, Chinese consumers will continue to dominate the global luxury consumption. China's local luxury goods market will grow rapidly, and with the help of capital integration and Internet platform, it is estimated that in 5-10 years or so, the consumption of Chinese luxury goods will exceed overseas consumption.

6, the myth of fast fashion brand is disappearing and the scenery is no longer. Apart from the continued development of individual brands on the basis of product advantages, most of the fast fashion brands will enter a wide range of shop closing models and face extensive losses from customers.

Analysis of six opportunities for China's luxury market in 2019

1, the Chinese government encourages domestic consumption, encourages high-end consumption, encourages imports, and encourages the development of Chinese brands.

2, a large number of high-end niche brands seek opportunities to enter the Chinese market and serve Chinese consumers.

3, there is great room for commercial development of traditional Chinese culture and traditional technology.

4, the new retail and peaceful customization will give Chinese brands the chance to succeed in counterattack.

5, there is a huge market space for luxury brand stores, especially for the three or four tier cities.

6, China's early entrepreneurs, namely the rich generation, will soon enter the pension mode, and the elderly luxury market deserves attention.

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