Buying luxury is becoming the choice for an increasing number of shoppers in China. A recent report said the trend has made the country a top contributor to the global luxury goods market.
So, how have luxury brands embraced the demand?
CGTN’s Hu Nan visited a company in Shanghai to find out.
China is going to have the world’s largest group of millionaires in 2018.
This partly explains why China stands as the world’s biggest contributor to the luxury market; it spent over 500 billion RMB in 2016, taking one third of the world’s total sales volume.
“Last year, the world’s luxury industry shrunk because of the sluggish economy and people’s decreasing confidence in a reviving economy. However, China’s booming middle class and the comparatively stable environment is boosting luxury consumption,” Zhu Xiaoying, a senior analyst for CBN Data said. “Chinese people now have more channels to purchase luxury goods, like overseas travel and e-commerce platforms.”
The huge potential in China draws the attention of industry powers. For example, LVMH—the leading group in the luxury industry—has started to explore the Chinese market on a more localized basis.
In 2016, LVMH generated a new skin care brand tailored for the Chinese market employing “the spirit of the tea” as their selling point, which is familiar to and quite welcomed by Chinese mainland consumers.
China is expected to make up nearly half of global luxury consumption in 2025, which is estimated to be 2.7 trillion RMB market by then.
“More and more consumers are purchasing luxury goods for their own happiness, to improve their life quality instead of showing off like what they did years ago,” Zhu said.
“Soon they will be willing to spend more money on luxury services like premier tourism agenda, or arts appreciation experiences and education.”
Michael Zakkour discusses luxury brands in China
CGTN’s Mike Walter spoke with Michael Zakkour about the luxury brand market in China.