50% of Chinese consumers will make luxury purchases in China by 2025
In its new study, Bain & Company revisits the latest luxury figures in China and reveals a rapidly changing local market.
First observation: 33% of luxury spending is made by Chinese consumers , followed by Americans (22%) and Europeans (18%).
The study looks back on the expansion of a Chinese "middle class" and the strength of the Millennials who are gradually gaining financial autonomy while benefiting from the help of parents. Thus, "70% of 23-38 year old Chinese have their own home, twice as many as Americans". A purchasing power on the rise that does not exclude the discernment and the requirement in every way.
Intramural luxury purchases on the rise
A major fact stands out from the analysis: sales of luxury goods increased by 20% in China in 2018 , a trend that consolidates the strong growth spurt that began in 2017. 27% of Chinese consumers now declare buying luxury goods within their borders, compared to 23% in 2015. According to experts, this figure could reach 50% by 2025 , driven in particular by the rise of market segments such as that Beauty registered more than 25% more sales last year in China.
This positive dynamics in intraborders is, of course, to be put in direct relation with the drop in taxes on imports but also with the work done by the brands in smoothing sales prices from one country to another and better control. of the gray market , ie resellers not approved by the houses like NetEase Kaola, currently sued by the Estée Lauder group for the unauthorized sale of MAC products.
A new digital ecosystem for Luxury Homes
But Bain & Company also highlights the strong increase in online sales of luxury products in China : in 2018, they grew by 27% to 10% of total sales in the territory. If this trend is correlated with the excellent sales figures of cosmetics products - whose "accessible" price positioning offers both an entry key to luxury goods and is subject to more uninhibited online purchases - it is also to be attributed to the emergence of a new digital ecosystem .
Thus, it seems that Luxury Homes have particularly developed their Owned Media - their corporate media in their own name - while increasing their presence on " Co-operators ", external platforms allowing them nevertheless extremely strong control over their brand content. This is particularly the case of the social network WeChat including mini-programs are particularly acclaimed for strategies drops . Brands also tend to collaborate more and more with aggregators such as JD.com or Alibaba's Luxury Pavilion.
While the Maisons have been able to benefit from the remodeling of these digital players - notably with the partnership of Yoox-Net-A-Porter and Alibaba or the combination of JD.com and Farfetch - this new deal remains inseparable from targeted marketing strategies, combining relevance, experience and new features continuously . And beware of the marks that would not keep the pace: for each House recording a growth of 25%, two players would struggle to reach 10%. The beginnings of a two-speed Luxury ... and an opportunity for a luxury made in China in full swing?