Worldwide spending on luxury products keeps on ticking. Yet, the leading marketplace for luxury products among young adults is not the United States or Europe. But China! And by a wide margin. Therefore, we look at understanding the young Chinese luxury consumer.
Key Market Segment: Understanding the Young Chinese Luxury Consumer
The dominance of Chinese consumers for luxury is astounding. And especially so for the young adult luxury consumers. A recent McKinsey & Company study bears this out. As Lan Luan, Aimee Kim, and Daniel Zipser report:
“Set to be the engine of global spending on high-end shoes, bags, fashion, jewelry, and watches, China’s affluent upper-middle class presents an enticing prospect for the world’s designer brands. In fact, Chinese luxury spending is expected to double to 1.2 trillion renminbi by 2025. Thereby delivering 65 percent of growth in the market globally. Young Chinese consumers view ownership and affiliation with designer brands as a form of social capital, not just something to wear, but a lifestyle choice that marks them as part of a distinct and exclusive community.”
“Research for the China Luxury Report 2019 also shows that the majority of these young consumers are fresh to the market. This presents both a tantalizing opportunity and an implicit imperative for brands to stay current, or risk losing out to more digitally savvy rivals. Furthermore, while some Chinese fashion houses excel at various aspects of online marketing and commerce. Yet, even China’s most popular luxury brands have yet to establish a comprehensive presence across the digital ecosystem. Consequently, opportunity abounds as brands seek to engage the attention of consumers in the world’s most lucrative and fastest-growing luxury market.”
Finally, check out the following McKinsey video that sums things up on this topic.