The sophistication of China’s luxury consumers is evident in a new study from market research firm Mintel that underscores their preference for quality and craftsmanship and desire to seek new brands including local luxury brands.
“Though status is still important to the Chinese luxury consumer, the trend toward luxury consumption for one’s enjoyment is clear,” said Matthew Crabbe, Mintel’s director of Asia Pacific research. “The wealthier a consumer is, the more likely he or she is to appreciate luxury goods for their innate quality and value.”
In certain categories such as watches and cosmetics, foreign brands are still prized for their superiority; otherwise, Chinese consumers are more willing to explore new brands. For luxury apparel and shoes, about 40 percent of Chinese believe local luxury brands provide the same quality, according to Mintel.
“There is a growing consciousness that, in many cases, Chinese brands are able to offer craftsmanship and design to a level that is on par with or above foreign brands,” Crabbe said. “We expect to see a growing segment of the Chinese luxury shoe and clothing markets in particular to be occupied by Chinese brands in the coming years.”
Among wealthy Chinese, craftsmanship is the most popular word to define luxury according to the Mintel study. Bloomberg reports that “almost two-thirds of urban Chinese put the term ahead of ‘expensive’ and ‘status’ and the portion rises to 71 percent for those with monthly household income of more than 25,000 yuan ($4,000).”
The study findings show a significant shift in the mindset of the Chinese luxury consumer that came quicker than anyone had predicted; although it is not surprising given the lightening speed of transformation in China’s luxury market. This shift is a windfall for independent luxury brands, especially domestic luxury brands.
Major international luxury brands such as Louis Vuitton and Gucci have already instituted changes by emphasizing their craftsmanship and upping their exclusivity. They are opening fewer new stores and redesigning existing stores to elevate the in-store luxury experience.
Chinese luxury shoppers accounted for about 28 percent of global luxury sales in 2013 or 61 billion euros ($84 billion) according to consulting firm Bain & Co. The major luxury brands do not want to lag in this important market.
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