How do you describe the Chinese luxury consumer? It depends.
Bain & Co and Redburn categorize luxury consumers by certain shared characteristics in their latest report, which also reveals some interesting insights on the Chinese luxury consumer.
There are an estimated 300 million luxury consumers worldwide spending US$295 billion in 2013, according to Bain. Chinese luxury consumers were the third largest consumer group at 14 percent, behind the US (27 percent) and Europe (24 percent), but they were the second highest spenders at US$1.7 billion, after the Middle Eastern consumers (US$1.9 billion).
Among the 300 million global luxury consumers, Bain estimated that 150 million of them are true luxury consumers, those who consistently purchase luxury goods. These true luxury consumers represent about 90 percent of the total luxury market in 2013 or US$258 billion. The Chinese make up 19 percent of this group or US$29 million.
Chinese luxury consumers are quite dynamic and have very diverse consumer profiles according to Bain. Among the seven segments of luxury consumers outlined in the report, about 60 percent of the Chinese belong to the Omnivore and Opinionated segments. The Chinese luxury consumers are spendthrift and they seek brand and advertising power.
Omnivore are the newbies to luxury, often from lower-tiered cities, and they have an insatiable appetite for luxury goods. They are brand name and status conscious. They are the Chinese luxury consumers most often portrayed in the media.
Opinionated are those who are more sophisticated about luxury and often live in the first-tier cities of Beijing and Shanghai. They exhibit a more measured approach to luxury goods instead of frenzy buying. They are connoisseurs and know what they want. They don’t go abroad just to shop but generally buy at home. Interestingly, both the Omnivore and Opinionated are influenced by social networks.
image source credit: bain & co