As luxury brands grapple with the rapidly changing Chinese luxury consumers, any insight into the shopping habits and awareness of this group provides an edge.
Results from a new Nielsen’s Mainland Chinese Luxury Shopper survey reveal the significant role of social media influence, travel retail, advertising, and e-commerce.
Nielsen surveyed 1,005 respondents from tier 1-3 cities who have traveled and purchased luxury goods overseas in the past 12 months and plan to do so in the next year.
Social Media and Online Platforms Heavily Influence Chinese Luxury Shoppers
According to the Nielsen’s study, 60 percent of respondents say their main source of information for purchases was social media and other online forums and review sites. Half of the respondents said official luxury brand websites were among their first stops for information. Furthermore, nearly 60 percent of those surveyed said they enjoyed the ease of browsing through luxury collections online.
Christophe Guillot, the associate director of luxury and tourism consumer insights at Nielsen Hong Kong, said, “Companies cannot directly control messages about their brands in earned media but they have the ability to create a positive brand presence on these channels.”
Many Chinese shoppers know exactly what they’ll buy before they even leave their houses. About 90 percent of respondents have their purchases planned before setting foot in a store, and 38 percent know exactly which products they will purchase.
Chinese Luxury Shoppers Prefer Traveling to Nearby Destinations
Despite the wave of Chinese luxury shoppers that travel to London or Paris for luxury shopping vacations, many prefer nearby countries.
For those living in southern China, Hong Kong and South Korea were their favorite destinations for luxury shopping. For those in the north, Japan and South Korea were the favorite destinations. Furthermore, southern Chinese were nearly four times more likely to travel than the average mainland Chinese traveler that was surveyed.
“Time and cost are considered the key factors for mainland Chinese travelers when selecting shopping destinations. The more distant the location, the more vacation days they have to take off work, which also means signing up for a more expensive travel package,” Guillot said.
Though luxury sales are slowing, shopping is still a major activity for Chinese travelers with 97 percent surveyed saying shopping is a key activity when traveling overseas. Guillot added, “These consumers would prefer to save on their travel expenses so they can spend more when shopping.”
The Buzz is Still About Quality, Design, and Brand Heritage
According to the survey, 56 percent of respondents associate luxury products with “quality,” while 46 percent associate luxury goods with “fine design.” For 4 out of 10 respondents, “established heritage” was important.
In fact, quality was the main driving factor in luxury goods purchases with 45 percent of respondents saying that was the main motivation. Other reasons for luxury purchases included self-reward and luxury brands giving the image of having taste and setting the purchaser apart.
Physical Retail Stores Are Still The Sales Leaders
Despite the rise of Alibaba and other online shopping platforms in China, e-commerce still hasn’t overtaken the physical retail store. Of those surveyed, 45 percent had bought luxury goods online in the past, and 77 percent knew of websites that sold luxury goods. However, 48 percent were still undecided on buying luxury goods online.
Furthermore, of the most recent luxury goods bought by those surveyed, only 2 percent of the products were bought online, 26 percent were bought at stores owned by luxury brands, and 24 percent were bought at duty-free stores in airports. Four percent said they would prefer to buy luxury goods online in the future. Those who had already bought luxury goods online said it was more convenient and saved time.
image credit: elias rovielo