Getting to know your Chinese luxury consumers

In 2014 Chinese luxury consumers were responsible for almost half of the world’s total luxury sales. While domestic purchases of luxury goods fell by 11%, down to $25 billion, overseas luxury spending grew 9% to $81 billion. These figures are good news for luxury goods retailers across the world. They show that the average Chinese shopper’s demand for luxury is still growing, and that more consumers are becoming savvy to the fact that they can get much more for their money if they go abroad. In fact, 76% of luxury goods purchases by Chinese consumers are made overseas (source: China Daily).

Securing the custom of Chinese visitors can prove to be highly advantageous for your business. Here’s what you need to know about them, in order to work on personalising your offering.

Their recommendations still come from China

Shoppers may be leaving China in order to purchase their luxury goods, but it is in China that they are discovering and trusting the brands that they are going to buy. Being able to demonstrate success is a big part of Chinese culture, hence the obsession with luxury goods. Unknown brands aren’t going to be much of a status symbol. The 2012 report by the China Luxury Network found that brand was the number one driver behind purchasing decisions (source: Luxury Society).

The takeaway message is that while you may be aiming to sell to Chinese visitors on your turf, you need to be marketing on theirs.

Not all Chinese luxury consumers are the same

While it is true that there is a high demand for luxury items as a status symbol, a report by the China-Britain Business Council found that luxury consumers can be divided into four distinct groups. With ‘Conservative Spenders’ and ‘Value-led Buyers’ making up over half of Chinese middle income earners, there is a large demand amongst consumers for quality. 80% of respondents to the Council’s survey say they are shifting towards midmarket brands, citing quality as being more important than a luxury label (source: China-Britain Business Council).

On the other end of the spectrum, a survey of 326 Chinese millionaires, with an average personal wealth of $6.8 million, found that British brands such as Jaguar, Harrods, and Haig Club whiskey consistently came top in their categories regarding popularity (source: City A.M.).

Chinese luxury shoppers are prepared to travel for good service

The need to offer good customer service should go without saying, however when considering the purchasing power of Chinese luxury shoppers it is important to go the extra mile. A 2012 survey by the World Luxury Association found that 45% of Chinese shoppers cited the fact that they get better service and shopping experiences as a major factor in their decision to shop abroad (source: The China Observer).

Chinese shoppers want to be looked after and treated with respect. In return, your efforts will be rewarded with the large transactions typical of Chinese shoppers abroad.

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