One could be forgiven for tiring of the combination of ‘luxury’ and ‘China’ in the media, of the endless forecasting, reporting and analysis that takes place on the world’s ‘most important’ prestige market. However a quick round-up of the facts by affluent social network P1.cn, is enough to jolt even the tiredest of business executives out of their China-over, and effectively communicate just how important the Chinese market is to our industry.
Let us consider that in 2010 luxury consumption in the region rose an unprecedented 23%, the equivalent of 12.7 billion US dollars. China now accounts for 27.5% of the global market, primarily purchased by roughly 50 million affluent consumers, who only account for 5% of the urban population. Looking at those statistics, the growth opportunities are frightenting.
Whilst it may come of no surprise that the ‘favourite’ brands in China are Louis Vuitton, Hermès and Chanel, what is surprising, is the age and employment status of the luxury consumer. In China, the customer is an average of 20 years younger than that of US and Japanese counterparts, with increasingly high levels of education and self-employment.
With this newfound affluence, ‘China has developed some huge communities and clubs, for wealthy digital members who want to improve their brand culture’ (Nathalie Omori). One particular social network, P1.cn, connects over 1 million members in Beijing, Shanghai, Hong Kong and Guangzhou, as well as developing Market Reports on luxury cosmetics, cars and mobile devices for the Chinese market. They present a video summary of their home market, drawing on some of the key business reports listed below.
Other must-read reports on China and luxury
- Bain & Company’s China Luxury Market study 2010
- Hurun’s Luxury Living Index
- McKinsey’s Understanding China’s Growing Love for Luxury