Agility Research & Strategy’s new study, “Luxury Consumption Survey — China Slows But U.S. Booms,” found that Chinese luxury consumers are more likely than their U.S. counterparts to buy luxury goods based on quality and exclusivity rather than on price or other factors. The study is based on more than 3,000 consumers across the U.S., China, Hong Kong, and Singapore.
Contrary to the past, for Chinese luxury consumers, a high price tag does not necessarily equal luxury anymore. It must also reach high quality standards.
Status still matters. Because Chinese consumers do not interact day-to-day with as many luxury goods as consumers in the U.S., luxury products are seen as part of one’s personal style, and wearing a recognizable brand is seen as a status symbol, reports Luxury Daily.
In fact, 56 percent of the Chinese consumers surveyed said that they agree completely or agree somewhat with the statement that it is important that others “recognize the brand they are wearing or using.”
Furthermore, only 4 percent of Chinese respondents said that quality was not considered when making a high-end purchase. If the quality and exclusivity threshold is met, only 50 percent of Chinese surveyed said it was important to find the lowest price. In the United States, 3 out of 4 customers look for the best price.
Even the preferred brands are different between Chinese and U.S. consumers. U.S. respondents favored affordable luxury goods with the top three being Coach, Ralph Lauren, and Calvin Klein. Chinese consumers favored Chanel, Gucci, and Burberry.
China has the world’s largest internet population and could account for 50 percent of global retail in the next decade, so it is no surprise that Chinese online luxury shoppers are outpacing their U.S. counterparts. Agility Research found that approximately 50 percent of U.S. respondents had bought luxury goods online, whereas 59 percent of Chinese consumers had bought luxury goods online. Furthermore, 80 percent of Chinese consumers research their luxury purchases online compared to the 65 percent who do in the United States.
In Hong Kong, consumers have taken to online luxury even more strongly. A report by Borderfree found that Hong Kong’s e-commerce is trending up due to low government restrictions and a higher level of western brand education due to traveling. The fact that many Hong Kong citizens are also fluent in English and have access to western social media such as Facebook and Google makes the connection to western brands easier as well.
“What we can see from this survey is that deeper motivations for buying luxury brands are very different in the two markets, and fine tuning brand messaging and the experiences offered through the buying process, to better meet the expectations of the Chinese consumer, offers opportunity for brands to build a better connection with the consumer,” Agility Research’s managing director Amrita Banta said.
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