What will Chinese luxury consumers want in the post-Covid world?

Although the world is still battling the Covid pandemic, marketers are already looking ahead to anticipate what their customers will want in the post-Covid world. There is no doubt that life has changed in many ways, with international travel curtailed, social distancing still a reality and global economics struggling to rebuild after national lockdowns. With that in mind, let’s turn our attention to one of the most lucrative and attractive markets in the world today and ask what Chinese luxury customers are likely to want once restrictions lift and global commerce returns to full strength.

The Chinese luxury market after Covid

The good news is that China’s market is strong and buoyant and its luxury retail markets are already picking up once again, with Chinese customers keen to purchase quality, authentic Western brands to show their taste and affluence. Studies show that Chinese customers are feeling optimistic about their economic prospects, with most expecting to enjoy higher levels of disposable income and wealth in the coming months, compared to the start of the year.

What are Chinese luxury customers buying?

As international travel is currently curtailed, Chinese customers are keen to indulge themselves with luxury shopping sprees – particularly in clothing, makeup and skincare lines, along with jewellery and high-end technology. And, with Covid still very much present, these affluent customers are keen to shop online and to enjoy products from their favourite Western brands, favouring fewer – but higher-quality – purchases that show their taste and awareness of key social trends, such as sustainability. Let’s look at how this translates into a series of key emerging trends that Western marketers should know:

1. Options for greater flexibility

Georgio Armani recently announced that he planned to move away from the twice-yearly fashion shows of old and embrace digital showcasing options according to his own schedule. This may well set a trend for luxury fashion and aligned industries. Customers may be less inclined to travel to fashion shows for both health, environmental and image reasons. This could mean an end to seasonal collections (a strategy already successfully employed by Moncler Genius.) At the same time, digital marketing channels mean that brands can use social media and their own digital eco-system to showcase products to customers whenever they want.

2. A desire for longevity and meaning

Millennials in China have long loved to purchase luxury goods, but early trends suggest that they are shifting their focus towards more durable, environmentally-friendly products, driven by a growing awareness of sustainability and a desire to be seen as ‘green’. At the same time, these younger generations will be reshaping their world-views after their first taste of privation. Their assumptions that economic growth and success will continue in an upward trajectory will have been challenged and their views of the world are likely to be adjusting. As a result, luxury brands should focus on purpose, values, meaningful experiences and storytelling with a focus on authenticity and heritage.

One immediate expected shift in the luxury goods markets? Prominent logos are expected to become a thing of the past, as conspicuous consumption takes a backburner for more discreet luxury appreciation. The good news for Western luxury brands? It’s far harder for counterfeiters to make convincing replicas without resorting to overt logos, which should help to protect the integrity of your brand in China.

3. Potential new business models

Wasteful fashion has become a hot topic and luxury brands are keen to distance themselves from images of landfill and poorly-paid workers in sweatshop environments. This means that the circular economy is a hot new trend and firms such as Panoply and Rent the Runway are becoming desirable. In the UK, luxury retail brand, Selfridges, has shared its intention to create a circular retail economy at the highest level with resell, repair, rental and refill options for customers – partnering with a peer-to-peer rental brand, Hurr, to create its luxury circular retail model. Expect Chinese luxury brands to also begin releasing their own worldviews of circularity – with lucrative partnerships and interesting new revenue models both all to play for.

4. Greater agility

Covid-19 demonstrated how unprepared the business world was to systematic uncertainty and risk. This means that luxury brands will be working hard to embrace creative thinking, agility and flexibility at their very hearts. Expect to see a movement towards more diverse, agile business models which can make rapid shifts as market conditions require. Western brands which can adopt similar leadership strategies are far more likely to survive and thrive in this new post-pandemic world.

5. A willingness to ‘buy Chinese’

The ‘Made in China’ campaign was powerful during Covid, and Chinese luxury brands have been heavily favoured during the pandemic – particularly as the country’s trade war continues with America. This could offer interesting opportunities to Western luxury brands who are keen to create fresh retail models and to work in China with complementary partnerships.

6. A passion for ‘Wellness’

The wellness market has been strong in the West for some time, and now it’s a huge trend in China too, especially amongst younger buyers. Chinese consumption is driven by myriad factors, such as identity, emotion and social connection – but the old desire to show wealth and economic success is now slowly being replaced by a desire to be fit, well and happy. This will be visible in greater sales of athleisure clothing, loungewear and home leisure luxury goods.

The takeaway for Western brands

Luxury Western brands cannot move past these uncertain times with old strategies and tired tactics. The world has been fundamentally adjusted by Covid-19, so those firms that can be flexible, agile and – above all else – ready to embrace meaningful, evidence-based change – can enjoy real success in China. To find out how Market Me China can help your luxury brand to thrive in China’s post-Covid market, contact our team for a no-obligation chat about your needs. Our team of digital marketing experts are ready to help and able to work using virtual tools to maintain social-distancing whilst delivering evidence-based results at every turn.