SHANGHAI — China is expected to surpass the U.S. to become the world’s second-largest consumer of luxury goods in the coming decade, perhaps within the next five years. Here are five tips to help luxury marketers reach those consumers.
1. Go digital
With the largest population of internet users in the world, China is a digital playground for marketers.
China’s luxury buyers are younger compared with those in traditional luxury markets. They are tech-savvy and spend an increasing amount of time on computers and smart phones. In the next couple of years, the dominant luxury buyers will be 25-to-35 years old.
The potential for buying luxury goods online is huge, but not enough brands take advantage of e-commerce opportunities.
2. Embrace diversity
The sheer size of the country and huge disparities in economic and cultural development among regions means that there is no “Chinese” luxury consumer. It’s a heterogeneous market with distinctively different groups. While the majority of the country is still in the process of being introduced to the concept of luxury, the most affluent and discerning luxury consumers are going beyond fashion and accessories. Art collections, private jets, European-style private education and customized luxury trips are just a few examples of China’s luxury market becoming more mature and diverse.
3. Keep an eye on Chinese brands
China is a very new market and currently does not offer much in the way of tradition and heritage, nor its “own” luxury brands–but that’s changing.
Shanghai Jahwa has created Shanghai Vive, a new line of homemade and high-end cosmetics. Jahwa opened the first Shanghai Vive boutique last summer in the newly refurbished Peace hotel. The brand brings a touch of old Shanghai history and glamour, reflecting the town’s heyday in the 1930s. It’s the first such high-end local cosmetics line, with beautiful lavish packaging–and prices to match.
4. Look north and west
Luxury is expanding beyond first tier cities, because China’s rich do not just live in Shanghai, Beijing, and Guangzhou. Luxury brands are waking up to this fast and focusing their efforts on building brand awareness in second and third tier markets. Chongqing, with one of China’s highest GDPs, is becoming a mecca for luxury brands. Gucci, Prada, Louis Vuitton are all setting up shops there. But don’t forget cities like Harbin, Dalian, Wenzhou, Taiyuan, and Urumqi. The battle of the luxury brands will definitely be played out in these other areas.
5. Offer experiences and get personal
Success for luxury marketers depends on more than good branding. They need to go beyond the big numbers, and understand what consumers are trying to achieve, then help them fulfill that dream and goal. What makes a luxury item seem luxurious is how it makes the consumer feel, what experience it provides, and the message it sends to the buyer’s entourage.
Luxury marketers need to offer a personal relationship and realize customers are looking to gain knowledge and expertise. For these wealthy consumers, the big price tag and the label alone do not necessarily equate luxury, but personalized service and a unique experience will give them an edge over their peers.
Luxury brands will continue to thrive by establishing a one-on-one relationship, and focusing on educating customers.
Article written by:
Chole Reuter
ReuterPR – Luxury Communications in China