This week in the news, three major trends define luxury in China, Stella McCartney plans further expansion in China, Chinese tourists are still the world’s biggest spenders, Mr Porter will open its e-commerce store to Hong Kong shoppers, and mainland Chinese shoppers are spending less in Hong Kong.
Luxury in China has ceased to be simply the possession and consumption of expensive, or even exclusive products. Now, it is more about self expression. As such, trends in the luxury market are shifting as consumers seek new ways to express and define themselves. Luxury is becoming increasingly discrete in China, with brands favoring smaller logos over extravagant iconography. Consumers are also paying more attention to the finer details of the products they purchase, and have developed a new appreciation for complex design work and simple but attractive craftsmanship. Furthermore, Chinese luxury consumers are looking for more brand education and hands-on experiences, as well as brands that embrace Chinese culture.
Stella McCartney CEO, Frederick Lukoff said of China, “I’m not sure it would have been ready four or five years ago. I think the Chinese consumer is gaining in sophistication at an unbelievable pace and that a brand like ours can succeed in China.” Adding to its one freestanding store in Beijing and two stores in Shanghai, the brand will open two more stores in China, another Beijing store and its first store in Chengdu. Adidas by Stella McCartney opened its first store in Asia this month in Beijing at the World Trade Center. Stella McCartney will hold receptions in Hong Kong and Beijing for top editors and clients. The stop in Beijing will include a showing of the brand’s new lingerie, Adidas, and children’s collections.
Chinese travelers are still number one when it comes to tax-free shopping, according to the latest study by Global Blue. Increasing their transactions by nearly one third, Chinese tourists accounted for 27 percent of spending. Last year, spending by Chinese tourists increased 20 percent after tripling between 2009 and 2012. Fashion was the most popular spending category, and France was the favorite spending destination, followed by Germany and Singapore. Global Blue estimates that Chinese outbound trips, not including Hong Kong and Macau, will increase to 60 million this year, up from 53 million in 2013. By 2016, Chinese outbound trips are estimated to increase to 77 million.
Luxury menswear e-tailer Mr Porter will open its online marketplace to shoppers in Hong Kong. As the menswear branch of Net-a-Porter, Mr. Porter will offer to Hong Kong e-commerce shoppers its luxury products from over 170 brands, including Gucci, Givenchy, Burberry, Lanvin, Alexander McQueen, and more. With Chinese e-commerce spending reaching 1.8 trillion yuan in 2013, Mr Porter’s fashion director, Toby Bateman revealed that Hong Kong is one of the company’s key markets and that the company’s goal is to help men become more stylish and sophisticated in their personal fashion. Mr Porter recently made its first foray into sportswear with the launch of Net-a-Sporter.
Mainland Chinese are still traveling to Hong Kong, but their appetite for shopping there has diminished. Reports by the Hong Kong Retail Management Association show that visitors increased by 20 percent in March and April of this year, but retail spending fell by almost 10 percent. while an estimated 80 to 100 thousand mainland shoppers visit the city every day, high-end retail purchases of items like jewelry and watches have plummeted by nearly 40 percent. Sales of usually favored items like phones and electronics have also seen a fall of 10 to 20 percent. Average consumer spending has decreased to just US$260, and visitors are no longer taking overnight trips.
image credit: attract china