Luxury Chinese Consumers in a New Decade: 5 Macrotrends Shaping the 2020s is a future-focused report by Reuter Intelligence, looking at the next decade of luxury business in China, the market that leads global consumption across the industry. Download the report here.
The research & insights division of Reuter Communications – a luxury integrated marketing and communications agency based in Shanghai and with offices in Hong Kong, Singapore, Sao Paulo and London – applied their foresight methodology to cover five key themes crucial for businesses to understand in order to strategise successfully in the 2020s:
Everything Inter-connected
Looking at the technology set to launch over the next ten years, the report finds that the consumer experience will transform from opaque to transparent – they won’t need to wait and see if an item of clothing fits, for example, as the technology will tell them in advance. Products and experiences that don’t provide this feeling of ‘instant access’ will seem anonymous and obsolete.
Advances in technology are possible thanks to Chinese consumers indeed being the ‘mobile, digital natives’ that they are known as. However, new capabilities will also mean being hands-free and device-free. With mobile tech becoming more seamless in terms of registrations and passwords into fingerprints, facial and voice recognition, this will evolve into closer integration from the consumer to physical spaces, as well as between each other.
Ultra Competitive
Taking a snapshot of China’s leading markets, the report lays out the opportunity: in travel, Chinese travellers are to account for a quarter of all global outbound travel by 2030. China is the world’s leading gold consumer for the sixth year running and is about to become the leader in both fashion and beauty.
In 2019, over 20,000 foreign brands from 77 countries and regions were selling via Tmall Global, Alibaba’s cross-border portal that allows retailers and brands without a China-based entity to sell to Chinese consumers.
This section of the report concludes that in order to win the biggest opportunity, all business or brand activity has to be China-specific. Not ‘localised’, but created for China, ideally in China with Chinese expert staff, agencies, creatives and influencers from the ground up – with the report forecasting key aspects of how to achieve this.
New Definitions of Luxury
A key theme throughout the research, this point centres on how the rules of luxury are no longer being set by western ideals; millions of newly affluent Chinese consumers are redefining the very notion of what luxury means, and brands must respond now.
The meaning of luxury in China is evolving – a combination of Chinese becoming more confident in their figurative luxury shoes and many millions of freshly urbanised Chinese consumers being new to luxury means that the old rules are out, and new Asian tastes are in.
Rising National Pride
An incredibly important factor in the next decade will be the national pride that is rising to ever higher levels. Brands can’t expect to simply say they ‘love China’ and leave it at that – a new balance of power is tipping, and fast. In 2019, after certain brands fell afoul of offending their largest consumer-base, influencers had a chance to trumpet their national pride and ceremoniously cut ties. Looking forward, far deeper integrations than a few Chinese brand ambassadors on the books and a post-offense announcement of love should be considered.
Seeking Sustainability
While no one is suggesting that all purchases will be made in order to save the planet, environmental consciousness has been growing, and will not decrease. Worldwide awareness of the current state of the planet is growing and the international discussion flows into China.
Luxury brands are savvy on corporate comms and few customers are going to chase them up on claims. But as the luxury consumer scales tip past a balance of what they want versus how they feel about it, luxury brands may not only need to talk more corporately but act more believably in order to satisfy an intensifying interest in sustainability.
