Here’s to a happy and healthy year of the horse! Gong Xi Fa Cai! In other news, Shanghainese are set to outspend New Yorkers on luxury goods, North Face hopes to capitalize on China’s growing outdoor culture, China consumes the most red wine worldwide, and fashion-forward women are changing China’s luxury market.
China’s wealthier consumers are looking to improve their lifestyle with experiences, exploration, and healthy living. Given these current trends, China’s outdoor sporting industry may be ready to take off. North Face has made a big push into the Chinese market with a fully integrated – TV, print, digital and social media – campaign that had people compete through “a gauntlet of physical trials at community festivals and culminated with a rock concert and camp out in the hills outside Beijing. The integrated campaign drew 216,000 new members to the brand’s online community,” reports Advertising Age.
The recent “Luxury Digital Behavior Study” by Milan-based ContactLab found that Shanghai consumers will outspend New Yorkers on luxury goods next year. The study’s primary focus was shoes, handbags, and apparel. Shoe purchases are expected to stay stable, while the handbag and apparel categories will experience increased sales. Sixty-nine percent of Shanghai consumers said they had bought luxury apparel in the past twelve months, spending an average of $1,010, a number that is expected to grow to $1,759, as the percentage of potential luxury consumers rises to 86 percent.
China (including Hong Kong) consumed 155 million nine-liter cases (1.87 billion bottles) of red wine in 2013, marking a 136 percent increase from five years ago. The country has now surpassed France and Italy, who consumed 150 million and 141 million cases last year, respectively. What’s more, most of China’s wine (83 percent) is produced within the country. In fact, the country is now the sixth-largest producer of wine in the world, according to the Wall Street Journal, with the provinces of Shandong and Ningxia becoming the primary locations of viticulture.
China’s increasingly affluent and independent female consumers are changing the face of the country’s luxury market. Although women account for a high percentage of luxury purchases around the world, they are only recently coming to dominate the Chinese market. Until recently, Chinese men, with their greater purchasing power and demand for business-related gifts, were the most frequent luxury buyers. However, in the wake of the country’s new austerity push, which forbids public officials from lavish spending, it is personal consumption by women that is taking precedence.
The country’s online sales have seen a dramatic increase over the past three years, growing from US$3 billion to US$64 billion in 2012. The Chinese online retail market became the second largest in the world last year, and over the next five years, its business-to-customer growth (B2C) is projected to average up to 34 percent. Until recently, little action has been taken to control this now thriving market.
Photo credit: Corey M. Grenier