The rules and definitions 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; this is the premise of one of five macro-trends identified in Reuter Intelligence’s latest Insight Report: Luxury Chinese Consumers in a New Decade.
Luxury in China is continually 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. The next decade for businesses is not simply about identifying their consumer as they know them today, but, thanks to massive urbanisation continuing in China, businesses must prepare for entirely new consumers in their hundreds of millions: consumers who will bring Chinese tastes further to the foreground of luxury.
In the report, this macro-trend featured commentary from Desiree Bollier, Chair and Global Chief Merchant of Value Retail Management. Known as “the woman who made Bicester Village“, Desiree shed light on how businesses should view the decade ahead:
“Shifting tastes from key consumers are expected in the next decade. Millennials and Gen Z have gone through – and are still going through – significant social changes and generational culture shifts. It is important to look beyond the numbers and recognize them not just for their immediate purchase power but for their future influence potential.
Businesses must be nimble and anticipate their customers’ rapidly evolving demands. We are in the business of experience curation – The Bicester Village Shopping Collection is continually evolving. Our Villages engage the senses, evoke emotion and create lasting memories through an exciting mix of fashion, art, food and culture. Guests are immersed in a sense of wonder, as they explore the worlds most coveted luxury brands alongside the thrill of discovering up-and-coming local designers.
Seeing a Chinese creative talent standing beside established international names creates a feeling of recognition and identity, it is a proud moment, and one that particularly resonates with our younger guests. International brands need to develop authentic local collaborations. As their younger customers grow, so to, will their expectation to see homegrown creative talent sharing the global stage.
Whereas the once-rising affluent consumer would not have had as much knowledge of luxury, through the changing media landscape, the digital age has served as an enabler, providing visibility into the world of luxury.
Social media has created a real-time dialogue and a status of success that they want to be a part of. Therefore, designing experiences that engage with consumers through creative storytelling is crucial. Millennials and Gen Z view their affiliation with luxury brands as a form of social currency, beyond product it is about a lifestyle choice that positions them as part of an aspirational community.
The challenge for brands is to retain brand loyalty, to keep the pace. Young Chinese luxury consumers make the majority of their purchases offline, and they demand a more personal service than previous generations.
They value exceptional clienteling, someone who knows their individual preferences and, importantly, engages with them beyond the transaction.”