China’s luxury market shrank by 1% in 2014
26/01/2015
In 2014, Chinese consumters spent an estimated $18.4 billion on luxury goods, a year-on-year fall of 1%, Bain said, basing its figures on an in-depth survey of 1,400 Chinese consumers with at least three years of luxury purchasing history.
“The region’s luxury market is undergoing a fundamental shift, brought on by evolving customer dynamics, an influx of new, emerging luxury labels, and an economic slow-down,” the consultancy said on launching its 2014 China Luxury Market Study. “As a result, luxury brands in China must step up their game in 2015 by adapting to new market conditions and customer expectations.”
Bruno Lannes, a Bain partner and author of the 2014 luxury study, said the field of luxury brands in China is breaking wide open and that there is a new window of opportunity for emerging brands. At the same time, he said it is imperative that more established brands don’t grow complacent as China’s luxury market continues to evolve, or they risk falling out of favour with consumers.
Mr Lannes went on to say that luxury brands are no longer competing with only each other for a greater share of shopper spend; they are also contending with consumers’ increasing interest in luxury travel and experiences, such as spas and cruises, rather than shopping trips. In Bain’s survey, 55% of consumers said they have spent money on a luxury hotel or resort, and 80% said they would increase their leisure travel, as opposed to shopping tours in the coming year.
Another phenomenon that Bain has highlighted in the 2014 China Luxury Market Study is the increasing use among high-end Chinese consumers of daigou, or overseas-based personal shoppers who buy and send luxury goods to customers in China. Chinese consumers spent between $9 billion and $12 billion on luxury goods using daigou last year, Bain said, with leathergoods one of the most important categories.
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