It Is Expected That The Luxury Market In Mainland China Will Grow Into The Main Consumption Force This Year

Recently, Tencent advertising and BCG jointly released the 2021 China luxury market digital trend insight report (hereinafter referred to as the report). According to the report, the luxury market in mainland China is expected to grow by 25% this year, and the post-90s will become the main consumer force.

According to the report, the luxury goods market in mainland China will grow by 25% to 520 billion yuan this year on the basis of the high growth rate of 27% last year. As for the growth reasons, the report said that in addition to overseas consumption return, it was more from the improvement of luxury shopping conditions and the change of consumption attitude in mainland China.

From the perspective of consumer groups, the post-90s consumers have officially become the main force of the market, accounting for 50% of the total consumer groups, contributing 46% of the market size, and will continue to maintain a consumption growth of 25% - 30% in the coming year. However, although the heavy consumer group accounts for only 11%, it has contributed 40% of the market share and has steadily increased.

As the main consumer force, the report says that the post-90s have a strong sense of self-consciousness and are driven by social circles.

In addition, post-90s consumers also pay more attention to social needs and brand experience. Atmosphere building in social circle, offline fashion / trend experience and brand creative content output can effectively stimulate the interest of post-90s mild / moderate customers. In addition to brand experience and content output, some surveys also show that unstable social event factors affect consumer decision-making, such as the sudden outbreak of new crown pneumonia, "Xinjiang cotton incident" and all kinds of events in which foreign brands do not respect China. The post-90s are more willing to support the growth of domestic brands.

However, whether it is the post-90s group or the heavy consumer group, the brand needs to work hard in many aspects to better retain these users. Fashion expert Zhang Peiying told China Business Daily that part of the premium of luxury brand consumption is in brand experience, and good shopping experience in the future is still the key to luxury drainage. In addition, it is necessary to strengthen after-sales service, so as to bring higher efficiency growth for luxury brands.

In terms of purchasing channels, the report shows that in terms of consumption amount, offline stores are still the most important purchasing channel, while online shopping frequency continues to increase, which has become an important channel for consumers and brands to make high-frequency purchases. In 2021, the proportion of online channel sales contribution is expected to continue to increase from 20% in 2020 to 22%.

Among different online channels, consumers expect the highest growth rate of purchase intention for brand official website and brand app. The customers of brand app are younger and prefer fashion style, showing strong consumption power.

The report shows that the post-90s prefer to place orders in small programs. Ms. Wan, a consumer, told reporters that the quality of brand stores on the official brand websites and small programs is more guaranteed, and some third-party e-commerce platforms have unclear channels, which will have doubts about the authenticity.

With the continuous evolution of social retail ecology, enterprises are gradually mature in the use of new digital sales tools, and play a variety of innovation. For example, Hermes has opened a wechat app store, where shoes and bags are sold. Some brands have opened small program flash stores, allowing consumers to buy big brand products at home.

Zhang Peiying told reporters that luxury brands have been working on online channels to establish a closer relationship with the post-90s group who love online shopping, so that the brand can enjoy the dividend of rejuvenation, and at the same time, it has also established the mind of brand rejuvenation.

Yang Li, managing director and global partner of BCG, said that digitalization and omni-channel have become the trend of a prairie fire. Only by understanding consumers' minds externally and opening up functional departments internally can we win the digital future.

(source: China business daily)