Top luxury industry business trends in China this year
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. Being Discreet and Personal 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. Consumers looking for a luxury vehicle, for example, are now as likely to be drawn to body-work lines and fine stitching as over-sized chassis and big engines.
There is also a new emphasis on personal fashion statements, or the ability to create one’s own unique style from a variety of collections with an exacting eye that is able to distinguish the merits of the materials available. Indeed, the personal is vital to the contemporary Chinese luxury experience, with an increasing number of consumers who say they buy luxury products to reward themselves rather than to flaunt their wealth.
The push against opulence has become familiar in a country that has recently been subjected to government crackdowns on extravagant spending. Yet consumers have always tried to avoid looking ostentatious in their luxury purchases, claiming that their consumption was “appropriate or even necessary for their position or title” even as they freely indulged in the finer things of life, according to Kantar. But ostentation on any terms is no longer desirable in China.
It’s About the Experience and Ethics
Luxury is as much about consumer smarts, brand education, and conversation as it is about ownership. Luxury has become less about what a consumer has than what he or she stands for. Consumers strive for a discerning eye with “the right to appraise vistas and objects as worthy.”
Unsurprisingly, experiential luxury is on the rise. For the hotel industry, it’s “about the journey so much as the destination”; for the automotive industry, it’s more about the drive than the car. In Beijing, for example, BMW owners have now set up a driver’s association whose membership “wasn’t just about VIP ownership but about car sharing and weekend drives to Inner Mongolia” during which members would help out at retirement homes and orphanages. The group also visited Sichuan to aid in earthquake relief efforts. Through these trips, the members’ personal experiences became integrated into the BMW brand narrative.
China’s austerity push has also made ethics important to luxury, which will soon “say more about what you do with your money than how much you have.” Brands will find success in emphasizing morality over elitism by using their profits for some social good or
employing impoverished groups of people. The idea that luxury can contribute to society goes a long way in assuaging consumer doubts about extravagant purchases.
Embracing Heritage and Authenticity
Although it may seem that Chinese consumers believe that Europe’s luxury brands are superior to their own, this attitude is evolving. Patriotism is becoming increasingly more important in luxury purchases, and future luxury consumers will “appreciate overseas players who find ways to pay homage to Chinese cultural status.” Foreign brands should take Chinese culture into account in their design and marketing strategies, showcasing China-inspired products during important seasons or in specialized collections. Concurrently, there is a growing interest in homegrown luxury brands among China’s affluent. Once deemed subpar, Chinese luxury brands are gaining prominence.
In general, “authenticity, heritage, provenance and uniqueness will be absolutely key” to luxury in China, and striking the delicate balance between tradition and innovation will satisfy consumers looking for an authentic luxury experience.
adapted from redluxury.com