InChina Monitor Chinese Luxury Report 2022
LUXURY MARKET IN CHINA
Mainland China overshadowed APAC financial results pag 9
Market analysis firms slashed expectations for Chinese luxury sales in 2022 pag 10
A positive momentum across Asia is coming pag 11
The role of Italy in the luxury sector is still prominent pag 12
Luxury design in China is still made in Italy pag 13
The rise of luxury for men: fashion and cosmetics pag 14
Is luxury ready to master livestreaming in China? pag 16
TRENDS – Chinese consumers re-evaluate their relationship with luxury pag 18
Perfume: an opportunity for luxury pag 21
02.
CHINESE LUXURY CONSUMERS
Who are Chinese luxury purchasers? pag 23
Importance of luxury or premium products by category in China in 2022 pag 26
Data from China highlights the emergence of the “He Economy” in luxury pag 27
Sales assistance is still crucial in the luxury shopping experience pag 28
Consumer sentiment in 2022 pag 29
Discussion around luxury spending on social media is on the rise pag 30
Chinese consumers now care about sustainability and body positivity pag 31
Live streaming for luxury still happens among criticism and praise pag 32
03.
THE RISE OF CHINESE BRANDS AND THE STATE
OF LUXURY IN THE FAR EAST
Are Chinese high-end products gaining ground? pag 35
To hedge against unknown risks, luxury brands are exploring new target markets in Asia pag 36
South Korea seems a promising growth engine for luxury in Asia pag 37
Purchasing power of Japanese consumers is also recovering pag 38
04.
CHINESE BRANDS – CASE STUDIES
CLOTHING – 歌力思 (Ge li si) ELLASSAY pag 41
CLOTHING – 波司登 (BOSIDENG) pag 42
CAR – 蔚来 (Wei lai) NIO pag 43
JEWELRY – 周大福 Chow Tai Fook pag 45
DESIGN & FURNITURE – Cabana pag 47
05.
EXPERT BITES
Francesco Fioretto Director of Education, Istituto Marangoni Shanghai pag 51
Gianpaolo Bruno Italy’s Trade Commissioner to China pag 52
Roberto Sergi Global Managing Director – Business & Markets at PINKO pag 53
06.
FINAL THOUGHTS
Our guidelines to navigate the chinese market in the near future pag 55
INTRO
OCT22
// The state of luxury
in China 2022
O1. Introduction
DUCTION
YOUR EYES ON THE CHINESE LUXURY MARKET
YOUR EYES ON CHINA
Launched in 2020, the In:China Monitor is the only market-specific
report offering insights based on first-hand data from China,
allowing brands to benchmark their performance in the industry
against updated indicators of local relevance.
In this fifth edition of the report, we provide different insights to help
Western luxury brands better nurture and optimise their retail
presence in the market by learning from the best performing
players in China. The digital and offline landscape in China is in
constant flux, and moving at incredibly high speed.
Are western luxury brands well-prepared for the road ahead?
image from:
www.ftchinese.com
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5
O1. Introduction
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Intarget view
Francesca Tezza
Fashion & Luxury Industry Leader
“
What drives the new chinese
luxury purchaser?
The rapidly evolving scenario in China, with
post-pandemic sentiment and the frequent
lockdowns, is shaping a mature high-spender
consumer. In order to adapt their strategy in
China, high-end brands should understand the
drivers that underlie this transformation, that
can be summon up in 4 keywords:
Francesca Tezza
Fashion & Luxury Industry Leader
In charge of the luxury department
1. NICHE: the desire of ‘show-off’ have been satisfied, and
today 89% of luxury purchasers [1] seek a desire for self
expression, rarity, sophisticate and subtle wellness.
2. LOCAL: younger cohorts are rediscovering the charm
of local traditions and history, which means prioritize local
brand, values and style for more than 50% of citizens [2].
luxury brands need to create a true connection with this
sense of national belonging and pride, through product and
storytelling.
3. VALUES: today’s luxury consumers are more curious of
what lies behind a branded product. This lead them to make
informed purchases and to prefer sustainable, transparent,
engaged and active brands, beyond support second-hand
market.
4. EXPERIENCE: beyond the channels: especially Gen Z
desire to have an immersive and meaningful experience with
Brands. Services and entertainment are important purchase
triggers’ for 73% of luxury purchasers [3], and to meet this
desire luxury brands should embrace innovation in all its
variations, including metaverse, AR, VR and gaming.
Confidential content
“
at intarget. She’s been working in
the Digital Industry for 15 years,
experiencing digital marketing in
several areas: affluent audience
understanding, brand monitoring,
advertising, content and social
media. These expertise, applied to
the management of fashion & luxury
projects, led her to support brands
with a data driven approach, with
the goal of enhance their digital
presence and achieving business
results.
[1]
Bluebell Group’s report “2022 Asia
Lifestyle Consumer Profile,”
[2]
Global Times Research Center
[3]
Boston Consulting Group & Tencent:
2021 China Luxury Marketing Digitalization Trend Report
6
YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O1. Introduction
// Intarget view
Stefano Generali
Managing Director intarget Shanghai
“
How do you see the future
of luxury in China?
In recent years, consumer
interest in luxury products has
grown relentlessly and today,
despite being a period of great
uncertainty, luxury continues to
have a strong attraction among
consumers, especially among
the younger generations. Faced
with the new opportunities
that are opening up today in
China’s 2nd and 3rd tier cities,
Western brands are facing a new
challenge: to compete with local
brands by adapting their global
strategies to an increasingly
complex and rapidly changing
local market.
Stefano Generali
Managing Director intarget Shanghai
In charge of the operations of
intarget’s Chinese office for business
development in Southeast Asia. His
professional career in the marketing
and communication sector and his
passion for innovation and digital, led
him to Shanghai where he has lived
for over 10 years, operating in the
fashion luxury sector, and holding the
roles of Brand Marketing Manager for
companies and Chinese companies
active in digital marketing. Today its
management’s goal is to support the
brand’s expansion projects in China.
“
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01.
LUXURY MARKET
IN CHINA
YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O1. Luxury market in China
// Mainland China
overshadowed APAC
financial results
Starting in mid March several fashion and luxury brands
reported sales decreases in China, mainly due to the severe
lockdown in Tier 1 cities, where 30% of Chinese luxury
purchasers live.
Revenue change YoY in Asia pacific (excluding Japan)
at constant exchange rates
+1%
-8%
+15%
-7%
H1 22 APAC
H1 22 APAC
H1 22 APAC
H1 22 APAC
YoY
r.lvmh-static.com/pdf
YoY
kering.com/.pdf
YoY
assets-finance.hermes.com
YoY
pradagroup.com
“Source: cn.fashionnetwork, The Wall Street Journal and Statista.”
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O1. Luxury market in China
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Market analysis firms
slashed expectations for
China luxury sales in 2022
Oliver Wyman
(Estimation calculated in June 2022) Premium and luxury goods businesses in China expect a
3% year-on-year growth this year, down sharply from an 18% surge they forecast a few months
ago. That’s based on a weighted average of the survey results.
Even in areas not locked down, client anecdotes said in-store traffic fell by more than 50%, and
the percentage of those visitors actually making a purchase was up to 30% lower, according to
the Oliver Wyman report.
The brands on average now expect 11% growth next year in their mainland China business, with
only 6% not planning for growth, the report said.
Bain & Company
(Estimation calculated in June 2022) According to the firm, there are two possible trajectories
for 2022.
Optimistic scenario: the growth of the first half of 2022 continues throughout the year. In this
scenario, the market would reach about 322 billion to 332 billion dollars by the end of 2022,
growing 10% to 15%.
Slower scenario: potentially lower growth rate due to a slower recovery in mainland China and
challenging spending in mature markets caused by inflationary pressures and macroeconomic
slowdown. Under this scenario, the market will reach 307 billion to 322 billion by the end of
2022, growing by only 5% to 10% over 2021.
Goldman Sachs
(Estimation calculated in June 2022) The estimates for China were revised from + 2% to -12%
at the end of the year. While the 5% growth hypothesis in 2023 remains unchanged.
The market is characterized by extreme uncertainty, the next few
months will be decisive in defining the direction of luxury consumption
in the country.
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YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O1. Luxury market in China
// A positive momentum
across Asia is coming
Despite recent economic difficulties, as Mainland China emerges from city-wide lockdowns,
according to majority of market analysis firms, the luxury market’s performance will be boosted
by strong domestic demand in the Asia-Pacific (APAC) region. The area could achieve a
compound annual growth rate (CAGR) of 7.9% between 2022 and 2025, compared to 6.7% for
the total luxury market.* This is due to sustained demand for luxury goods and the investment
luxury brands have made through opening innovative stores and targeted marketing
campaigns and collections.
*Source: globaldata.com
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O1. Luxury market in China
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// The role of Italy
in the luxury sector
is still prominent
The Study Center of the Italy China Council Foundation provides a clear picture of the italian
exportation of luxury products in China in 2021, showing reassuring signs of recovery after
the critical moments faced in 2020. The percentage changes compared to the pre-pandemic
period, recording increasing numbers in almost all areas, the absolute protagonist in 2021 was
the jewelery sector, compared to the same period in 2019. Positive trends also for clothing
and footwear categogories.
Italian export of luxury products to China
2021 VS 2019
+ 207%
200
150
100
+ 46.7%
50
+ 34.23%
+ 5.58%
+ 21.10%
0
Jewelry
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Clothing
Footwear
Glass
products
Porcelain
and ceramic
products
12
YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O1. Luxury market in China
// Luxury design
in China is still
made in Italy
China imported around US$ 2 billion of furniture in the year 2021. Italy was the first country
partner, supplying one fourth of total imports. In the last ten years Chinese imports from Italy
have increased by about 13% annually on average, thus testifying to the extraordinary demand
for top-quality products.
*Source: Study Center of the Italy China Council Foundation
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O1. Luxury market in China
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// The rise of luxury
for men: fashion
and cosmetics
According to a report by data analysis firm iiMedia Research:
$104 billion
China’s menswear
industry in 2021
8.47 %
Compound Annual
Growth Rate in the
next five years
According to another report from the Chinese firm QuestMobile, new trends have subtly
evolved as a result of the general development in male consumption awareness in China.
Image source:
google.com
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YOUR EYES ON THE CHINESE LUXURY MARKET
Men are no longer solely identified as the family’s provider. With job, socializing, family, and
living alone, men lead various lives. Today, many people place a higher value on their quality
of life, as seen by the fact that more men are making deliberate decisions to take care of
themselves. They have started to engage in recreational activities and have learned how to
improve their self-image via extensive social networks.
HIGH-QUALITY CONSUMPTION
DIVERSIFICATION OF THE MARKET
men’s interest in high-end products
is growing
new categories are emerging on the
market, such as cosmetics
All age groups now consider quality and brand in addition to price when making purchases,
and young male consumers have joined the major client bases of beauty businesses.
Users between the ages of 31 and 50 are more engaged on various
platforms for product seeking, and they are paying greater attention to
platforms for live broadcasting.
Additionally, 51-year-olds have started to take an interest in and pay attention to beauty
products, entering the hip customer demographic.
Male consumers between the ages of 31 and 50 pay attention to both quality and elements
related to brand recognition, with an emphasis on brand recognition reaching a high of 67%
among this age group.
Source: QuestMobile
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O1. Luxury market in China
OCT22
O1. Luxury market in China
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Is luxury ready
to master livestreaming
in China?
Given that restrictions have affected the operation of brick-and-mortar stores in China and
local consumers have switched to e-commerce, online sales channels are becoming more and
more crucial for luxury brands.
Some insights from the “2022 Taobao Livestream Annual New Consumption Trend Report” in
partnership with iResearch:
~90%
of luxury beauty
businesses use
livestreaming
+187%
growth in revenues
from brand-owned
channels annually
(as of March 2021)
+25.8%
Average viewing time
for livestreams on
Taobao Live
streaming (2022 VS 2021)
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YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
01
02
03
O1. Luxury market in China
Top three categories
by gross retail volume
recorded via livestream
in 2021:
WOMEN’S FASHION
BEAUTY
JEWELRY
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YOUR EYES ON THE CHINESE LUXURY MARKET
// Chinese consumers
re-evaluate their
relationship with luxury
RENDS
O1. Luxury market in China
OCT22
Confidential content
Digital as integral part of the value proposition
Besides the growth of traditional luxury production, luxury experts
believe that digital assets like the metaverse, social media and
videogames will play an increasingly important role in the value
propositions of brands in the near future. Bain & Company predicts
that by the end of 2030, these new assets may account for 5% to
10% of the luxury goods market.
Less flashy designs
The current wave of closures, together with rising inflation, creates
a climate of uncertainty that is driving Chinese consumers to cut
back on non-essential expenses and be more cautious in their
purchases, but it has favored less flashy luxury brands.
Brands with more understated designs and less visible logos will
benefit from the growing interest of Chinese consumers in this style
of luxury. The desire for more privacy and discretion will further
drive the growth of online luxury sales in the future.
Demand for sustainability
Sustainability represents a call to action for luxury brands. Innovate
in sustainability is the key to build a competitive advantage.
The job market is changing, especially for younger generations.
Luxury brands will have to broaden their value offerings, embrace
diversity, change their focus from recruiting to creating talent and
effectively deploy automation.
18
YOUR EYES ON THE CHINESE LUXURY MARKET
CHINESE CONSUMERS RE-EVALUATE
THEIR SPENDING
Rising interest in second hand luxury
The second-hand luxury goods market in China is valued
at over $8 billion USD, 5% of China’s luxury sector.* As
luxury resale catches on in China, investment buying is
on the rise. Coming out of pandemic lockdowns, luxury
shoppers in China are looking to make the best investment
purchases as resale changes the perception of value.
*Source:
Report from China’s University of International Business and Economics and Isheyipai
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O1. Luxury market in China
The trend of outdoor sports is getting stronger, because
of its dual value to physical and mental wellbeing. Starting
from camping, various “lightweight” outdoor sports such
as skateboards, frisbees, skis, and paddleboards have
gradually become a popular way of life. Xiaohongshu’s Top
Ten Life Trends in 2022 shows that in 2021, the search
volume of Xiaohongshu’s “ski tutorial” increased by 100%
year-on-year, and the content release volume of camping
and frisbee increased by more than 5 times year-on-year.
The industry is still in the early stage of development, facing
policy supervision that needs to be improved, new traffic
acquisition costs, and difficult to retain users. Outdoor
sports are worthy of attention because they have opened
up new scenarios for brand marketing in accurately
reach young people and arouse emotional resonance.
In such a scenario, luxury brands can expand a variety of
cross-border gameplay to break the situation of marketing
homogeneity.
TREND
Luxury while enjoying leisure time
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Chinese consumers
re-evaluate their
relationship with luxury
RENDS
O1. Luxury market in China
OCT22
Confidential content
Metaverse
Luxury sector is exploring the metaverse to create new customer
encounters. High-touch, enhanced experiences, such as virtual
try-ons and shopping, virtual idols and influencers, gaming,
virtual goods, and NFTs are the core elements of this new trend.
Although the technology needed is still developing, China and
Chinese customers are undoubtedly paving the way for greater
adoption. China’s virtual idol sector is expected to reach 1.5 billion
yuan by 2023, is an example of how luxury brands are sometimes
substituting virtual engagement for human interaction. Brands
are creating digital-first and digital-only products for inside these
metaverse environments.
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YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O1. Luxury market in China
// Perfume:
an opportunity for luxury
The awareness of some luxury brands in China is mainly related to the perfume industry.
This market still has a big potential in terms of consumer behavior.
Low
penetration
Positive
Growth
GEN Z lead
the growth
2.5%
+17%
50%
Chinese population
that use personal
fragrances (vs 52%
USA and 42% FR)
YoY exp.
China’s fragrance
market will growth
at an accelerated
compounded rate over
the next 5 years
of youngest generation
use perfume on a daily
basis
Source:
intarget stydy on data from Mintel, iResearch, Vogue Business,
Daxue Consulting, Ecommerce China Agency, Jing Daily, Statista
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02.
CHINESE LUXURY
CONSUMERS
YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
Chinese consumers represented 35% of the global luxury
market in 2021, over half of these consumers are Gen-Z
and Millennials, with an average age of 28 years old – ten
years younger than most global luxury buyers.
O2. Chinese luxury consumers
// Who are Chinese
luxury purchasers?
Source:
intarget elaboration on GWI, Tencent and
BCG – Timeframe: Q3 2021-Q2 2022
PROFILE
GENDER
GENERATION
Chinese who
purchased one of
these brands in
the time frame Q3
2021-Q2 2022:
% of chinese
luxury purchaser
who identify as
the following
Millennials and
Gen Z are nearly
78% of luxury
purchasers in
China
Prada, Versace, YSL,
Bottega Veneta,
Celine, Dior, Burberry,
Valentino, Fendi,
Chanel, D&G,
Balenciaga, Zegna,
Gucci, Hermes,
LV, Cartier, Coach,
Ferragamo, Moncler,
Bulgari
Reach:
249,51 Ml
profiled as
luxury purchasers in China
Confidential content
Age groups:
6.60%
14,90%
49% 51%
26,20%
21,10%
31,30%
16 – 24
25 – 34
35 – 44
45 – 54
55 – 64
23
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
O2. Chinese luxury consumers
WHO ARE CHINESE LUXURY PURCHASERS?
// “ Which of the following, if any,
currently brings you joy?”
Consumers are more interested in experiencing social
activities rather than shopping and owning material items.
In China, this trend impacts on how luxury brands should
redesign their phisical boutiques as well.
Attending live events (i.e. sport events, concerts)
Surveyed pool:
Chinese citizens who purchased one of these
brands in the time frame Q3 2021-Q2 2022:
Prada, Versace, YSL, Bottega Veneta, Celine,
Dior, Burberry, Valentino, Fendi, Chanel,
D&G, Balenciaga, Zegna, Gucci, Hermes, LV,
Cartier, Coach, Ferragamo, Moncler, Bulgari.
Going out (i.e. to a bar, club)
Travel / taking vacations
Exercise / Sports
Spending time with friends
Animals / Pets
Healthcare / Medicine
Dining / Eating out
Spending time with family
Personal care / toiletries
Clothing / Shoes
Electronics / Tech
Utilities ( e.g. electric, gas, water, internet )
My job / work
Hobbies
Housing (e.g. rent, mortgage, maintenance)
Accessories (e.g. watches, handbags)
Food / groceries
Out-of-home entertainment (e.g. bars, restaurants, cinema)
Confidential content
Source:
intarget elaboration on GWI survey data
Timeframe: Q3 2021-Q2 2022
24
YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
WHO ARE CHINESE LUXURY PURCHASERS?
O2. Chinese luxury consumers
// “ Thinking about the future,
I think my online shopping
behavior will…”
Online shopping is expected to increase greatly within the
analyzed audience of luxury consumers in China in the near
future.
Increase greatly
Increase somewhat
Remain the same
Decline somewhat
Decline greatly
Surveyed pool:
Chinese citizens who purchased one of these
brands in the time frame Q3 2021-Q2 2022:
Prada, Versace, YSL, Bottega Veneta, Celine,
Dior, Burberry, Valentino, Fendi, Chanel,
D&G, Balenciaga, Zegna, Gucci, Hermes, LV,
Cartier, Coach, Ferragamo, Moncler, Bulgari.
// “ Which of these have you been
most price conscious about
in the last 3 months? ”
Luxury (e.g. watches, handbags)
Travel / vacations
Out-of-home entertainment (e.g. bars, restaurants, cinema)
In-home entertainment (e.g. Yv streaming, gaming)
Fitness
The analyzed audience of luxury
spenders in China is looking for
value for money and getting
more aware, thus reducing
buying expensive items.
Electronics / Tech
Clothings / shoes
Healthcare / medicine
Housing (e.g. rent, mortgage, maintenance)
Personal care / toiletries
Confidential content
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YOUR EYES ON THE CHINESE LUXURY MARKET
// Importance of luxury
or premium products
by category in China
in 2022
“ In which of these
product categories do
you also buy premium
or luxury items? ”
Source: China; April 2021 – March 2022;
18-64 years; 4033 respondents
Statista Global Consumer Survey (GCS)
A new emerging product
category of luxury spending
revolves around hi-tech. This
can be considered the next
frontier of luxury innovation.
61%
Share of respondents
60%
54%
48% 47% 47%
50%
38%
40%
32% 31%
30%
30% 29%
21% 19%
20%
10%
16% 16%
14% 13%
10% 9% 9%
7%
4% 3%
7%
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O2. Chinese luxury consumers
OCT22
Confidential content
26
OCT22
// Data from China
highlights the emergence
of the “He Economy”
in luxury
According to the mentioned report by iiMedia Research, China’s menswear industry was
worth $104 billion in 2021 and is expected to grow at a CAGR (Compounded Average Growth
Rate) of 8.47% in the next five years.
Men now dress differently, paying greater attention to how they look. When it comes to
marketing industry expansion, including marketing in luxury, male customers are leading the
growth. For three years in a row, high-end male sales outpaced those of womenswear, according
to Vogue magazine. Additionally, some companies that initially only catered to women are now
developing collections for men as well.
Even while foreign brands are still very well-liked and appealing in China, the domestic
menswear brand market has now achieved stability, has clear competitive advantages in
terms of visibility, localization, and price, and is gaining from the influence of nationalism.
Confidential content
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O2. Chinese luxury consumers
YOUR EYES ON THE CHINESE LUXURY MARKET
O2. Chinese luxury consumers
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Sales assistance is still
crucial in the luxury
shopping experience
A brand’s sales assistant plays a key role in offering an
experience that feels unique. Personalized services and
priority services at the store were the next most critical
factors for the customers.
About half of the luxury sales assistant surveyed
communicate with their customers through WeChat text
messages, 37% through WeChat voice messages, and a
third with phone calls. After these communications, most
of their customers have already made up their minds over
a purchase by the time they arrive at the store. Gen Z
luxury shoppers buy in order to reward themselves and
like to make purchases with the accompaniment of a sales
assistant.
Surveyed audience:
3000 Chinese luxury shoppers who had
spent at least 6000 US dollars in the past
12 months, top luxury shoppers who had
spent more than 30,000 US dollars a year,
interviews with sales assistants from luxury
brands of leather goods, ready-to-wear
fashion items, accessories, and fine jewelry.
Types of exclusive benefits luxury spenders desire the most
% of respondents, N=3,000
Relationship and day-to-day
communication with SA
29%
28%
Personalization services
22%
21%
Prioritized services at store
15%
17%
Free gifts and celebrations during
special dates
14%
14%
VIP events
(e.g. fashion show, VIP-only sale)
11%
12%
Pre-order of hot items
8%
8%
Gen-Z
Above 25 years old
Source:
Oliver Wyman Luxury Global Consumer Survey
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YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O2. Chinese luxury consumers
// Consumer sentiment
in 2022
Chinese consumers who have suffered losses in the epidemic may have taken a more cautious
attitude towards consumption, which will be the essential issue that luxury retail will face after
the inevitable retaliatory consumption. China’s total retail sales of consumer goods fell by
11.1% year- on-year to 2.95 trillion yuan in April this year, of which total retail sales of goods fell
by 9.7% to 2.68 trillion yuan. Unemployment among young Chinese climbed to 16% by the end
of March.
“ I am 70% happy, 20% traumatised and 10% vigilant,
I am glad life is getting better. I get to go to work, buy
things and live more or less like a modern city dweller.
Yet it’s hard to not be traumatised for anyone who has
experienced what has happened in Shanghai. I am
pessimistic towards ‘life returning to normal’. It’s never
going back to the old normal and I’d rather be vigilant and
prepared.”
Andrew, a 28-year-old science researcher from Shanghai
“ I have a lower threshold for what makes me happy now.
Even just going out under the sun, buying some delicious
snacks, satisfies me. I would rather spend the big money
on experiences — for example travelling — instead of
buying a bag.”
Jessie, a 23-year-old Shanghai gaming specialist
“ I don’t have that much desire for luxury goods, I spend
most of my time at home now, so it’s more important to
improve my quality of life there.”
Plusplus, a 28-year-old shopper from Shanghai
Source: businesslend.com
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O2. Chinese luxury consumers
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Discussion around
luxury spending on social
media is on the rise
In August, the tagline #why do young people stop purchasing from luxury brands# on Weibo
received millions of views in just a few days. The tagline featured an article about a young
woman who realized she was spending too much on luxurious skincare products, therefore,
stopped buying unnecessary items. Many young users commented they stopped purchasing
luxury products too, or even fancy drinks or snacks, as they are realizing that they don’t feel
the need any more. The article states that young people today focus on practicality and enjoy
finding affordable alternatives for expensive goods. They also prefer niche designer brands
that closer reflect their personalities. On the other hand, McKinsey latest report on Chinese
consumers indicates that young spenders tend to outspend their budget because they are
confident to earn more in the future. In fact, many netizens were cynical about the tagline,
commenting that the only reason they don’t buy luxury is due to not having enough capital.
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YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O2. Chinese luxury consumers
// Chinese consumers now
care about sustainability
and body positivity
A survey by Yiwealth published in December 2021, showed that young people’s purchasing
ideology is shifting to “consuming for self-pursuit” and “sustainable purchasing”, emphasizing
the product’s value for money.
Data has indicated that many Chinese people are severely impacted by impulsive spending
and the desire of buying luxury, even though younger Chinese are aware of the dangers of this
attitude. For instance, in 2021, despite the fact that many people voiced their displeasure prior
to the “11.11” shopping holiday, Tmall’s overall transaction value increased by 8% from the
previous year to 540.3 billion RMB.
According to the survey results from GWI luxury purchasers, consumers perception of their
appearance is moving to a more body positive mindset, and appearance is becoming less
relevant.
I’ve become more body positive over time
I scrutinize my appearance a lot
I’m happy with the way i look
I often compare myself to others
I’m trying to tone up / lose weight
Surveyed pool:
Chinese citizens who purchased one of these brands in the
time frame Q3 2021-Q2 2022: Prada, Versace, YSL, Bottega
Veneta, Celine, Dior, Burberry, Valentino, Fendi, Chanel,
D&G, Balenciaga, Zegna, Gucci, Hermes, LV, Cartier, Coach,
Ferragamo, Moncler, Bulgari. intarget elaboration on GWI
survey data Timeframe: Q3 2021-Q2 2022
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O2. Chinese luxury consumers
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Live streaming
for luxury still happens
among criticism
and praise
There is a general consensus among Chinese shoppers that buying luxury is simply to fulfil
the needs of social recognition and status, not functionality. Luxury brands have successfully
developed an exclusive brand positioning by trivializing practicalities and concentrating on
telling “exceptional” stories. This makes their products all the more desirable.
In China, purchasing decisions of up to 30% of luxury shoppers are swayed by public opinion
(data from QUMIN survey). Hence, maintaining a desirable image while avoiding the
negative sentiment from audiences outside of target demographics is a must in this market.
Therefore, luxury houses with high price ranges are usually more prudent when it comes to
curating content on their livestreams. Last year Burberry rolled out a mother and child themed
livestream session on Tmall without any hard-selling tricks, sharing shopping experiences from
the perspectives of mothers, while introducing Burberry’s house legacy and styling tips for kids.
Tmall Luxury Pavilion features a virtual consultant that imitates the VIP Rooms at offline
luxury stores, offering exclusive shopping guides and one-on-one livestreams to showcase the
products.
Whether livestreaming can become luxury’s new online channel in the future depends on
how brands create exclusive services and seamless virtual shopping experiences.
Photo:
Alibaba Group
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OCT22
O2. Chinese luxury consumers
YOUR EYES ON THE CHINESE LUXURY MARKET
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03.
THE RISE OF CHINESE
BRANDS AND THE STATE
OF LUXURY IN THE
FAR EAST
YOUR EYES ON THE CHINESE LUXURY MARKET
// Are Chinese high-end
products gaining ground?
With their competitive advantages — such as localization, pricing, and customer experience —
Chinese fashion-luxury brands are able to pinpoint what Chinese consumers really want.
In fact, China’s menswear market revenue surpassed the US for the first time in 2020, reaching
$92.3 billion (Statista). The cultural competence of Chinese luxury brands is the strongest point
of these new players.
Leading characteristics of Chinese
brands in China in 2022
Drawing from Chinese culture and
history
Share of consumers
who prefer Chinese
luxury brands over
foreign ones for the
same price and quality
in China 2022
65.5%
59.4%
Traditional craft designers
Interpreting modern designs with
Chinese eyes
54.7%
42.4%
Chinese founders
Disagree 0,4%
Chinese designers
39.8%
Founded in China
33.7%
0%
10%
20%
30%
40%
Neutral 15%
50%
60%
70%
80%
Share of respondents
Source:
Statista, Daxue Consulting
Surveyed audience:
Agree 84,6%
Release date: March 2022
Region: China
Number of respondents: 1,000
Surveyed audience:
Release date: March 2022
Region: China
Number of respondents: 1,000
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O3. The rise of Chinese brands and the
state of luxury in the Far East
OCT22
O3. The rise of Chinese brands and the
state of luxury in the Far East
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// To hedge against unknown
risks, luxury brands are
exploring new target
markets in Asia
Political and economic instability, inflation and lockdowns
in China indicate new critical elements, relevant for 2023.
The latest episodes expose how over-reliant many luxury
players have become on China, while it’s advisable for
brands to direct some of their attention toward other
smaller, high growth emerging markets around the world.
According to ALTAGAMMA CONSENSUS 2022 MARKET
UPDATE,the lockdowns and restrictions have reduced
the expansion of the Chinese market. For Asia, the experts
estimate a +5% in spending in 2022, or halved growth
compared to last year forecasts. The performance of South
Korea, which is growing both in cultural relevance and in
the number of luxury consumers, should be noted. Japan
confirms the growth potential with a more moderate
recovery of +7.5%, despite the anti-Covid-19 measures,
inflation and the depreciation of the yen. Concerning
consumer behavior, the Japanese and consumers in the
rest of Asia respectively recorded +7% and +9% in luxury
spending, that is lower than the expected growth calculated
earlier this year.
Source:
ALTAGAMMA, Bain & Company
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YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O3. The rise of Chinese brands and the
state of luxury in the Far East
// South Korea seems
a promising growth
engine for luxury in Asia
Luxury brands in Asia are eyeing South Korea, which seems to offer the second greatest
potential in terms of revenues in APAC region. According to statistics, Shinsegae Department
Store in Gangnam District, Seoul, had sales that exceeded 2 billion US dollars, last year. This
made it one of the upscale department stores with the second-highest turnover in a single
location worldwide, behind Beijing SKP’s 3,5 billion US dollars. The largest luxury brand in the
world, Louis Vuitton, saw a robust increase in sales of 40% in South Korea last year, and its
operational profit doubled year over year. Sales of the upscale French brand Chanel increased
31.6% year over year in South Korea. In its 2021 financial report, Kering Group did not offer
precise performance information for the Korean market, although it did frequently reference
the increasing contribution of the Korean business to APAC revenues. Dior held the 2022 early
autumn series fashion show at the Ewha Womans University in Seoul, South Korea on April 30,
to connect the brand’s history with one of the most dynamic cities in the world. This was done
to aknowledge the continuous increase of the consumption power of South Korean luxury
goods.
Sources:
ALTAGAMMA, Bain & Company
en.imsilkroad.com
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O3. The rise of Chinese brands and the
state of luxury in the Far East
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Purchasing power
of Japanese consumers
is also recovering
Japan’s per capita GDP reached 39,000 US dollars in 2021, significantly higher than the EU
average. Japan saw a 30% increase in LVMH sales in the first quarter of 2020, second only
to Europe’s 45% growth. The sales employees of Hermes in Ginza also disclosed that since
the start of the pandemic, their workload has not diminished and that there have even been
scenarios in which supply ran low.
This indicates that despite the shortage of Chinese tourists, the pandemic has increased
local Japanese consumers’ appetite for and demand for luxury items.
Given that China is still the market that contributes the most growth momentum among major
luxury brands, the weak performance of global luxury brands is a foregone conclusion. Brands
need to invest and strategize carefully to maintain much-needed revenue streams from
older, reliable mature markets such as Japan.
Ultimately, Japanese shoppers’ high awareness of luxury brands and appreciation of
experiential retail signal the market’s largely untapped potential when it comes to digital and
online-to-offline (O2O) strategies. Furthermore, as brick-and-mortar stores recover from
the pandemic, companies can rely on effective delivery systems thanks to the nation’s
advanced logistic infrastructure.
Covid-19 may serve as the wake-up call that agile and resilient firms need to undergo a long
overdue digital transformation. Luxury brands that want to capitalize on this need to move
quickly. While local online multi-brand channels remain sparse, players could shift their focus
to mobile giant Line, the Japanese leading communications app which plans to merge with the
owner of Yahoo Shopping and QR code payment app PayPay and speed up development across
the platform’s existing e-commerce capabilities. Following further in WeChat’s footsteps to
become a super-app by developing an all-encompassing digital ecosystem, Line boding well for
luxury brands with established followings on the app.
Sources: Statista, Business of fashion
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OCT22
O3. The rise of Chinese brands and the
state of luxury in the Far East
YOUR EYES ON THE CHINESE LUXURY MARKET
LUXURY MARKET
IN JAPAN OVERVIEW:
Japan is the 3rd largest luxury
goods market globally, after U.S.
and China.
JAPAN’S ECOMMERCE
PENETRATION RATE IS
8.7%
Source: Statista, Business of Fashion
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04.
CHINESE BRANDS
CASE STUDIES
YOUR EYES ON THE CHINESE LUXURY MARKET
O4. Chinese luxury brands – case studies
OCT22
CLOTHING
// 歌力思 (Ge li si)
ELLASSAY
About ELLASSAY:
ELLASSAY established in 1996, cultivating confident, independent, smart, elegant as its brand
image, targeting women in modern cities with high-end lifestyles. ELLASSAY cooperated with
Tencent Smart Retail and utilized the digital traffic benefits on Tencent in order to acquire more
potential customers, increase customers’ loyalty and increase product sales, leading the brand’s
digital transformation.
Case Study:
Brand Virtual Ambassador Promoting Brand’s Transformation in Sustainability
In line with the group’s sustainability goals and to further connect with younger generations,
especially GenZ, ELLASSAY has taken big steps towards digital transformation, in order to
innovate digitally and also to practice the group’s vision of ‘Shape a Greener World’.
From March 2022, the Brand Virtual Ambassador 飒ELISA started her internship in the
sustainability department in the ELLASSAY group and became the group sustainability
ambassador after her internship.
Branding Activities Based on 飒ELISA
Virtual Ambassador:
• Brand x NFT: At the 7th anniversary of the A-sharing
listing in 2022, ELLASSAY published its limited edition
of NFT using the image of 飒ELISA.
• Membership Management: In April 2022, ELLASSAY
published the digital membership card to empower the
digital collection value with 飒ELISA on it.
• KOL Collaboration: 飒ELISA published the S/S 2022
collections together with GenZ super model Jiang
Ruiqi.
Virtual Ambassador 飒ELISA
Image source: ELLASSAY Weibo account
@ELLASSAY歌力思
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O4. Chinese luxury brands – case studies
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
CLOTHING
// 波司登
(BOSIDENG)
About BOSIDENG:
Famous for its down jackets, BOSIDENG’s brand awareness is high among Chinese customers
from premium to higher-end collections. During the past years, BOSIDENG has been aiming to
transform its brand image into higher-end/luxury territory, raising product prices, promoting
innovative products, etc. BOSIDENG promoted their brand and products in fashionable and
digital ways, collaborating with hot celebrities & stars, expanded offline store coverage in
higher-end cities, promoting themselves under Chinese cultural trend, etc.
Case Study:
BOSIDENG x Douyin Super Product Day
(A e-commerce live-streaming festival on Douyin)
Campaign Launch: 25 October-31 October 2021
Channel: Douyin & Offline Show
Topic: To launch new product: trench-style down jacket
Introduction: BOSIDENG created a new style for its iconic product, the down jacket, and
promoted it in a fashionable way. During the offline show, many celebrities in the fashion
industry showed up to increase the show’s popularity and the brand utilized the live-streaming
IP, Douyin Super Product Day, to ensure the campaign’s wide coverage, creating social buzz
online, and easily interacting with audiences online and pushing sales.
Results: 1
– Impressions:
+750 million
– Total GMV:
84 million RM.
1. Source: Digitaling,BOSIDENG x
Douyin Super Product Day
Image source: Digitaling.com
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YOUR EYES ON THE CHINESE LUXURY MARKET
O4. Chinese luxury brands – case studies
OCT22
CAR
// 蔚来 (Wei lai)
NIO
A Chinese Car Brand that Deep Dive into Brand Ecosystem:
About NIO: 蔚来NIO is a high-end Chinese electric car brand that is also expanding to Western
markets. It’s perceived as one competitor of Tesla in the Chinese market. Provided the common
conception that electric cars are greener, and cost less on energy compared with traditional
cars, what makes NIO also stand out and be popular among Chinese car owners is NIO’s
community marketing strategies to help establishing a unique brand ecosystem.
NIO Brand Ecosystem:
Digital Touchpoints
• NIO App: in the community on the App,
users can interact with each other to
share feedback about NIO cars, and can
also directly communicate with the NIO
factory and with senior executives.
• NOMI: an in-vehicle artificial intelligence,
it functions as a driver assistant on NIO
cars and can provide an immersive driving
experience.
Offline Experiences
• NIO House: House: This offline space
(inside NIO stores) is designed for
NIO owners to share experiences and
memorable moments together. Customers
can find lab, library, forums and other
community facilities in these spaces.
• NIO Life: NIO built its own product lines,
producing well-designed daily products
such as T-shirts, cookies, wine, etc. These
products are sold through the NIO
e-commerce platform i.e. mini-program.
• NIO Day: The mega event for NIO owners
to have fun.
NIO Car
Image source: NIO official website
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O4. Chinese luxury brands – case studies
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
CAR
// 蔚来 (Wei lai)
NIO
Focus:
Campaign Collaboration: NIO for Chinese
Wildlife protection
As an electric cars manufacturer, sustainability is a major
focus for NIO. On Earth Day 22 April 2022, NIO Life
published ‘Clean Parks · National Park collection’.
The collection included original IP products in 4 kinds of
state-protected wildlife parks in China’s Sanjiangyuan
and historical intangible cultural heritage crafts: green
embroidery series products. 25% of the sales revenue was
used for an eco-conservation fund, NIO stated on its social
media.
Green embroidery collection visual
Image source: Socialbeta
Clean Parks · National Park collection visual
Image source: Socialbeta
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YOUR EYES ON THE CHINESE LUXURY MARKET
JEWELRY
// 周大福
Chow Tai Fook
Chow Tai Fook gold necklace
Image source: Chow Tai Fook official website
Products:
Gold collections are one of Chow Tai Fook’s key products and unique selling points compared
with other western jewelry brands. Chow Tai Fook’s products, including their diamond
collections, target different groups of customers, from higher end to lower end.
Chow Tai Fook Sales Ranking FY2020:
According to Deloitte’s report “Global Powers of Luxury Goods 2021”, the Chinese luxury
group based in HK, Chow Tai Fook, ranked in the Top 10 list for consolidated luxury goods sales
over 2020, with LVMH Moët Hennessy-Louis Vuitton SE and Kering SA ranking at the Top 1 and
Top 2 positions.
Successful Marketing Strategies applied:
•
Expanding in Lower-tier Cities: During the past several years, Chow Tai Fook focused
more on lower-tier cities in China to increase the group’s competitiveness. The group
opened more offline stores to expand market coverage in Tier 2 and Tier 3 cities.
•
Online Campaigns and Localized Collections:
IP Collaboration: Chow Tai Fook cooperated with
Disney, Tencent games, celebrities to promote theme
collections.
Chinese Culture Promotion: Chow Tai Fook utilized
traditional Chinese culture to produce collections that
differentiated it from Western brands, i.e. the Palace
Museum collection.
Customer Experience:
Chow Tai Fook D-ONE: A customized jewelry service
allowing customers to design their own jewelry.
Offline store: Upgraded the in-store shopping experience
for customers through unique store decorations, i.e.
周大福荟馆JEWELRIA( A high-end offline store that
integrates Chinese culture and western culture.)
•
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O4. Chinese luxury brands – case studies
OCT22
O4. Chinese luxury brands – case studies
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
JEWELRY
// 周大福
Chow Tai Fook
Focus:
IP Collaboration: Chow Tai Fook & Tencent Games
Campaign Launch: 29 July-11 August 2022
Channel: Online shooting game 暗区突围, Chow Tai Fook e-commerce channel
Topic: Promoting co-branded gold collections under game’s theme
Introduction: Game players can search for gold jewelry in the game’s maps; when taking with
gold jewlery, players can get more game benefits, and can join a lottery to win real gold jewelry
when completing game tasks. Through entertaining ways, the gold jewellery collections are
promoted very well. This campaign was intended to drive brand awareness among new, younger
potential customers.
Chow Tai Fook D-ONE POP-UP Activity
Campaign Launch: 3 August 2022
Channel: Offline POP-UP store, O2O
Topic: 时光定制馆 Time Customized POP-UP Gallery
Introduction: This activity integrated online and offline channels, under the Time theme,
bringing the Day One romantic memory to customers. In addition, through this POP-UP
activity, Chow Tai Fook showed more complete customized collections and detailed service
about D-ONE, increasing the brand awareness and unique jewelry customization services, to
meet young generations’ diversified needs.
Chow Tai Fook & Tencent Games Campaign
Visual
Image source:
Chow Tai Fook official website
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YOUR EYES ON THE CHINESE LUXURY MARKET
O4. Chinese luxury brands – case studies
OCT22
DESIGN & FURNITURE
// Cabana
About Cabana:
Established in 2019, Cabana is a high-end home furnishing retail brand. Targeting younger
Chinese customers, Cabana sells both online and offline. At offline stores, there is a members’
club featuring a VIP area with special benefits, which creates a better customer experience.
Customers can also make purchases at the e-commerce store on mini-programs, where they
can find more product collections.
At only 3 years old, Cabana is young, and in order to increase awareness of the brand Cabana
created diversified content to communicate with customers and also collaborated with other
brands.
Content Collections:
•
•
•
•
Cabana Brand Files: A column to introduce
multiple furniture brands on Cabana WeChat
official account.
Home Furnishing Inspirations: To share home
decoration ideas under different themes, i.e.
Christmas, movies, etc.
Play At Home: Is a song lists created by Cabana,
inviting musicians, artists, architects, designers, etc.
throughout the world to share music for people
staying at home.
Cabana taps on you: A figure column featuring
people from the fashion and lifestyle sectors
sharing insights about life.
Cabana get Wallpaper award
with USM modular furniture
Image source:
Cabana official WeChat account
Cabana flagship store in Beijing
Image source: Cabana official Zhihu account
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O4. Chinese luxury brands – case studies
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
DESIGN & FURNITURE
// Cabana
Case Study:
Cabana x Maison Margiela POP-UP Activity
Cabana collaborated with Maison Margiela to promote perfume through a POP-UP store; if
customers sign up for membership when visiting the store they receive a perfume sample.
Cabana x Kvadrat/Raf Simons
In order to promote its 3 years anniversary, Cabana produced a limited collection: 6 iconic
chairs, made in collaboration with top design brand partners worldwide and decorated with
high-end fabric produced by fabric workshop Kvadrat and designer Raf Simons.
Cabana x Maison Margiela POP-UP store in Beijing
Image source: Cabana official WeChat account
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Cabana 3-year anniversary limited edition
Image source: Cabana official WeChat store
48
OCT22
O4. Chinese luxury brands – case studies
YOUR EYES ON THE CHINESE LUXURY MARKET
Source:
STONES DESIGN Lab.
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05.
EXPERT
BITES
YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
// Expert bite by
Francesco Fioretto
“
O5. Expert bites
Director of Education,
Istituto Marangoni Shanghai
What is the upcoming context
in which luxury brands will need
to market in China?
There is an aesthetic transformation taking place in
the country, led by a change in the taste of Gen Z.
Besides the renowned luxury capitals of Shanghai,
Chengdu and Shenzhen, Chongqing is emerging as the
city of alternative fashion. The Gen Z is in fact antibrand and alternative. The must-have values that
Francesco Fioretto
this generation looks for in fashion are sustainability,
Director of Education,
Istituto Marangoni Shanghai
ethics, wellbeing, diversity and authenticity. In
this sense, the symbol of this artistic and aesthetic
transition is the decision to appoint Margaret Zhang as the new Editor-in-Chief of
Vogue China. She is an intellectual spreading authenticity and disruption, in opposition
to former gloss, as the young generation is shaping the concept of art and fashion in a
futuristic perspective.
The two complementary elements that will characterize the future of fashion in China
are technology and sustainability. As for the much talked about Metaverse, China is
already in the cyber punk era and has a greater social acceptance of technology in a
utilitarian key. Social and sui generis designs are starting to send a message about the
urgence to wear non-impacting technology. Research centers are merging the world of
art and fashion with tech. It is advisable for brands to imagine a cross over in this sense.
Chinese pride is also to take into account: Chinese designers are now creating their
collections and are probably interested in getting to lead big luxury groups in the near
future, rather than expanding in western markets with their luxury labels.
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51
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
// Expert bite by
Gianpaolo Bruno
O5. Expert bites
Italy’s Trade Commissioner
to China
“
What is the current state
of luxury in China?
As luxury market is recovering from pandemicrelated effects, Chinese consumers are
increasingly seeking out brands that best
reflect not only their personal lifestyle, but also
their value system and passionate beliefs. On
the other hand, luxury brands are constantly
reengineering their business models to deepen
direct relationships with their clients and expand
customers’ experience, relying on digitalization
and the metaverse, diversifying products and
styles, multiplying contact points and marketing
activations while increasingly offering innovative
and environmentally friendly products.
Gianpaolo Bruno
Italy’s Trade Commissioner to China
“
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YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
// Expert bite by
Roberto Sergi
O5. Expert bites
Global Managing Director
Business & Markets at PINKO
What are the most relevant trends
in the luxury sector in China?
In luxury and fashion markets there are some trends
that might reshape the business area.
First is the emerging of Chinese brands. It is not a
new phenomena at first Chinese brands entered into
the most affordable area forcing the main American
and European fashion brands to leave the market or
downsize their own presence. Now, post-covid, there
are successful Chinese brands competing in premium
segment and some attempt also in luxury segment.
I trust will be more than a phenomena since the
quality of offer is very high, a big wave of nationalism
and cultural confidence can speed up the shifting of
perception of Made in China.
Roberto Sergi
Global Managing Director – Business &
Markets at PINKO
Secondly the way to reach the customer, the success
of live-streaming and video platform, Douyin,
Kuaishou, Taobaolive, Pinduoduo just to mention few
and even 1 to 1 livestreaming is the new challenge for
luxury brands.
How to reach, engage and offer an experience without
having the customer in the shop is the new challenge
for the brands and the same the new big opportunity.
“
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06.
FINAL
THOUGHTS
YOUR EYES ON THE CHINESE LUXURY MARKET
OCT22
O6. Final thoughts
// Final Thoughts
With their competitive advantages — such as localization, pricing, and customer experience —
Chinese brands are becoming able to pinpoint what affluent Chinese consumers really
want. By analyzing their marketing strategies, Western established luxury brands can
experiment new approaches, such as rethinking their boutique experiences, exploring
nearby markets, and cooperating with local brands.
MONITOR THE MARKET AND EVOLVE WITH IT
In order to stay on track with the fast-evolving Chinese luxury market, brands should
observe the digital, social and business scenario from inside this market, through local
advisors based in Mainland China for first-hand updates about Chinese consumer
sentiment, local brands’ strategies and APAC markets development.
In particular, the key actions to prioritize should be:
#1.Get to know your target
UNDERSTAND THE NEXT AFFLUENT CUSTOMERS
From different surveys and experts’ interviews, it emerges that younger Chinese consumers are
interested in experiencing social activities and embracing technology, while caring about quality.
The Chinese Gen Z, in specific, considers itself as alternative and committed to sustainability,
ethics, wellbeing, diversity, and authenticity. Online shopping is also part of this target’s daily
routine and will continue to be important for them in the near future.
These elements should be the starting point of luxury brands strategic thinking to redesign their
customer journey, transform the role of physical boutiques and improve the online presence.
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O6. Final thoughts
OCT22
YOUR EYES ON THE CHINESE LUXURY MARKET
FINAL THOUGHTS
PROTECT THE TOP LINE: VIP CLIENTS
Ensure a consistent and an ongoing valuable relationship with the top customers, regardless of
the touchpoint, physical or digital.
In the Chinese landscape this means reaching out to VICs via private messaging, ad hoc
advertisement and content. Beyond courting wealthy shoppers with gifts, events and trips, it
is important to be updated with their needs. This was evident during recent lockdowns, when
luxury firms served complimentary meals and sweets to its “extremely important clients” as a
method of showing empathy.
#2. Embrace local perspectives
CREATE LOCAL STRATEGIES
In an uncertain global economic scenario, multi-country fixed strategies don’t work anymore.
brands should be flexible and listen more to their local marketing teams to design localized
marketing strategies.
CARRY ON A CONSISTENT AND CLOSE COMMUNICATION WITH THE AUDIENCE
Embrace a local perspective also means to stay close to the local affluent customers
ensuring a consistent and transparent communication flow. Strategic decisions should be
communicated to clients in a clear and understandable manner so that they feel engaged and
take into account in the development of their beloved brands.
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OCT22
O6. Final thoughts
YOUR EYES ON THE CHINESE LUXURY MARKET
#3. Evolve to stay top of mind
MONITOR WHERE NEW CUSTOMERS PRIORITIES ARE AT
The recent economic scenario is characterized by unpredictable and sometimes sharp price
movements that are worrying consumers in all markets. In this context, luxury brands need to
ensure that they stay top of mind within their audience by checking on the customers online
discussion periodically and aknowledge their changes in priorities.
EMBRACE CHANGE AND DIVERSITY
Invest in fully understanding the implications of new geopolitical dynamics and cultural
trends for all stakeholders, consumers, investors, industry workers and society at large. In this
way luxury brands will be able to expand their value propositions, embrace diversity, become
talent creators as opposed to talent recruiters, and smartly leverage automation, creating a
new future for younger generations.
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// About us
intarget is the partner for strategic consulting in the customer journey.
Founded in Pisa in 2001, it now has four additional offices in Milan, Rome,
Lugano and Shanghai. For twenty years it has been supporting companies
operating in the business and consumer markets by building effective
and measurable brand strategies for brand positioning and optimal
coverage of the customer’s journey.
intarget supports national and international brands on a path towards full
digital maturity and the achievement of set business objectives.
Thanks to an international team of over 170 professionals, it aims to
enhance and improve the interaction between people and brands,
making the most of the potential offered by digital technologies and
platforms and creating innovative solutions.
Find out more
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// Authors
Stefano Generali
Anna Pupi
Managing Director
intarget Shanghai
Analyst, Sinologist
intarget Shanghai
In charge of the operations of intarget’s Chinese office for business development in Southeast Asia. His professional career in
the marketing and communication sector and his passion for innovation and digital, led him to Shanghai where he has lived for
over 10 years, operating in the fashion-luxury sector, and holding
the roles of Brand Marketing Manager for companies and Chinese companies active in digital marketing. Today its management’s
goal is to support the brand’s expansion projects in China.
Francesca Tezza
Fashion & Luxury Leader
intarget
In charge of the luxury department at intarget. She’s been working in the Digital Industry for 15 years, experiencing digital marketing in several areas: affluent audience understanding, brand
monitoring, advertising, content and social media. These expertise, applied to the management of fashion & luxury projects, led
her to support brands with a data driven approach, with the goal
of enhance their digital presence and achieving business results.
Anna Pupi is a sinologist and marketing consultant for the Chinese market. Anna joined intarget family in 2017 and from 2019
she has been developing Shanghai intarget operations as a cultural mediator and China market specialist, supporting Western international brands in their internationalization journey to China.
Her expertise ranges from market analysis to localization strategies and branding within China digital ecosystem.
Emma Lian
Analyst
intarget Shanghai
Emma Lian is a marketing consultant for the Chinese market. She
has experiences in marketing and business development, connecting Chinese and global businesses. Emma’s expertise ranges
from search engine marketing, social communication, digital PR,
business cooperation, etc. Currently Emma acts as project manager and consulting analyst in intarget, managing digital marketing projects for some major global luxury brands. She owns
an international background and studied several years in North
America.
