Buying Luxury Brands Will Increase The Layout Of Low Tier Cities And E-Commerce Platforms

In February 25th, the Rhodes communication group and the precision Market Research Center jointly published the "2020 China luxury goods report" (hereinafter referred to as the "report"), showing that in the past 2019, online shopping and local consumption have become an important growth point of China's luxury market. At the same time, China's luxury goods market is gradually sinking from the first and second tier cities, and the consumption performance of the three and below cities is bright, which has a very strong purchasing power. Coupled with the outbreak of a new coronavirus pneumonia outbreak at the beginning of the year, the luxury market in 2020 was full of more challenges.

Affected by multiple external factors such as China's economic slowdown, international trade frictions and regional events, consumer confidence in luxury purchases in mainland and Hongkong declined in 2020. According to the report, 44% of mainland Chinese consumers and 32% of Hongkong consumers will increase their luxury spending for the next 12 months, which is basically the same as the 2019 report. However, 10% of mainland Chinese consumers and 20% of Hongkong consumers will not be able to reduce their expenditure in 12 months, compared with 6% and 12% last year. Marked increase. Compared with last year, excluding mainland consumers in cosmetic make-up, the proportion of other categories in the next 12 months will be increased. Watches, bags, electronic products and cars and other consumer goods programs reduce the proportion of spending is relatively higher.

High end clothing and jewelry became the most popular luxury goods category in 2019. The report shows that over the past twelve months, more than 6 of the respondents in Hongkong bought high-end clothing and jewellery, and mainland Chinese consumers reached as high as 7. Compared with the mainland of China, Hongkong consumers pay more attention to experiential consumption. Among them, the number of people eating in high-end restaurants accounted for 56%, much higher than that in the mainland of China, and 55% of the consumers in Hongkong were slightly higher than the 48% in the mainland of China.

With the sinking of the luxury market, the three line cities and below will become an important layout area for future development. Gaoming, senior vice president of Rhodes Communications Group and managing director of luxury business in Greater China, said that in the past year, mainland Chinese consumers spent nearly 330400 yuan on luxury goods annually, and Hongkong was about 167400 Hong Kong dollars. It is noteworthy that the annual cost of the three and below cities is about 393900 yuan, higher than the 344100 yuan in the first tier cities and 275000 yuan in the second tier cities. As a result, the low level cities have strong purchasing power and will also be an opportunity and growth engine for the development of China's luxury market in the future.

In addition, there will be more luxury brands in 2020, especially the Tmall based platform leading the luxury online consumption. According to the report, more than half of Hongkong consumers prefer buying through brand official website while buying online platform. In the mainland, consumers preferred Tmall platform, and about 60% of consumers said they bought luxuries using the platform. At the same time, the proportion of brand official website shopping has also increased significantly, reaching 48% of users. Jingdong ranked third. With the upgrading of China's consumption, especially the maturity of consumer attitudes, luxury electric business has become the growth point of the industry's high hopes in the future. The major e-commerce platforms are also expanding the business of luxury goods. Tmall luxury channel has more than 150 luxury brands in the official flagship store. In addition to cooperation with leading e-commerce providers, luxury brands are developing their proprietary business through official websites and WeChat applets because of their rarity and high end characteristics.

Although the electricity supplier has become the high ground for luxury brand competition, how to win consumer trust is still the top priority. Gao pointed out that compared with last year's data, consumers in Hongkong were more comfortable with online shopping, and most of the categories had a small increase in data, while mainland Chinese consumers were more comfortable shopping online than consumers in Hongkong. However, mainland China consumers were less comfortable with watches and jewellery products online shopping than last year.