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Luxury - Beyond Summits Ltd...Source:Bain & Company, China Luxury Market 2015© 2016 Beyond...
Transcript of Luxury - Beyond Summits Ltd...Source:Bain & Company, China Luxury Market 2015© 2016 Beyond...
Luxury
© 2016 Beyond Summits
Summary:
• China’s luxury market scale dropped by 2% to CNY113 billion in 2015 year on year. Declining
sales in watches, menswear, bags and luggage were the main reasons triggering the downturn
luxury market, especially in north China and northeast China.
• Sales and customers of luxury stores and emerging brands have decreased year on year.
Some following consequences were caused, such as the close of brand stores, more cautious
about online store expansion, more efforts in the maintenance and renovation of core stores.
• Luxury consumers are more willing than before to participate in digital channels, thus brands
will keep on expanding their digital marketing platforms. Some brands are already testing their
online channels now(official websites or third-party platforms).
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• Since 2012, the government has
increased the anti-
corruption efforts, causing the
consumption decline of luxury
goods.
• The government lowered the import
tariffs of luxury goods, added and
restored duty-free shops at foreign
trade ports, formulated the policies of
inspection and quarantine supporting
cross-border e-commerce, cleared the
unreasonable fees. These policies
resulted in the boom of luxury
consumption and created a better
environment for cross-border e-
commerce in luxury industry.
• China’s GDP has continued to
grow year by year. The economic
growth promoted the
development of luxury industry
and the upgrade of consumption
products.
• In 2015,China’s overall scale of
individual investible assets and
the number of high-net-worth
individuals have continued to rise,
boosting the consumption of
luxury goods.
According to the investigation from
World Luxury Association, Chinese
buyers of luxury goods gradually
showed a younger age. The age of
consumer group decreased from 35
years old to 25 years old on average,
which had some influence on the
marketing and promoting ways in
luxury industry.
Policy Factor Economic Factor Social Factor
Features of China’s Luxury Industry
106
116 115
113
0
20
40
60
80
100
120
140
2012 2013 2014 2015
China’s Luxury Market Scale (CNY billon)
30%25%
20% 18%
22%25%
30% 32%
15% 15% 13% 12%
11%10% 13% 11%
6%7% 5%
6%
6% 6% 7% 8%
5% 5% 6% 7%
5% 7% 6% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015
China’s Luxury Market by Products
Accessories
Womenswear
Shoes
Jewelry
Menswear
Bags and Luggage
Cosmetics,Fragrances,Productsfor Personal UseWatches
Source:Bain & Company, China Luxury Market 2015
China’s luxury market was going through a recession in 2015, mainly caused by anti-corruption,
slowdown in economic growth, and stock market collapse in the second and third quarter of 2015.
Luxury consumption in watches, bags & luggage, and menswear dropped significantly.
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In 2015, CAGR of womenswear marked the highest in China’s luxury market, up by 10% than
2014. CAGR of menswear declined to the lowest point at 12%.
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5%
-10%
-5%
-12%
7%
10%
-6%
2%
-15%
-10%
-5%
0%
5%
10%
15%
Cosmetics etc Watches Bags andLuggage
Menswear Jewelry Womenswear Accessories Shoes
CAGR of China’s Luxury Market (2015 vs 2014)
Source:Bain & Company, China Luxury Market 2015 Note: CAGR = Compound Annual Growth Rate
Source:Bain & Company, China Luxury Market 2015
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Cosmetics, Fragrances,
Products for Personal
UseWatches
Bags and
LuggageMenswear
CHANEL
Dior
Estee Lauder
LANCOME
LANEIGE
Top 5 Luxury Brands in Mainland China
Cartier
Longines
OMEGA
ROLEX
Tissot
COACH
GUCCI
HERMES
LOUIS VUITTON
PRADA
Armani
HUGO BOSS
Burberry
Dior
Zegna
Jewelry Womenswear
BVLGARI
Cartier
CHOW TAI FOOK
Tiffany
Van Cleef & Arpels
Armani
Burberry
CHANEL
Dior
Max Mara
Accessories Shoes
Zegna
GUCCI
HERMES
LOUIS VUITTON
Montblanc
CHANEL
GUCCI
LOUIS VUITTON
Ferragamo
TOD’S
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Luxury goods that Chinese consumed in Hong Kong and Macao showed a decline to 12% in 2015,
down from 18% in 2014. Yet the consumption for luxury goods in Japan increased significantly.
Cross-border e-commerce and overseas websites have sprung up, accounting for 12% of China’s
luxury consumption, and 46% of mainland Chinese consumers purchased luxury goods in these
ways.
30% 28%
18%12%
6%
7%
14%
11%
16%
19%
2%
5%
4%5%
10% 13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Luxury Consumption outside Mainland China
Others
South Korea
Japan
Europe
US
Taiwan
HongKong/Macao
MainlandChina
61%
46%
0%
10%
20%
30%
40%
50%
60%
70%
Procurement Service Cross-border E-commerce & Overseas Websites
How Mainland Chinese Consumers Purchased Luxury Goods
Source:Bain & Company, China Luxury Market 2015 Note: Only for the consumers living in mainland China
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Outlet stores are important channels to buy low-price luxury goods for Chinese consumers. Outlet
stores have expanded in recent years in mainland China, rising to 138 in 2015.
40
52
68
83
98
138
30.0% 30.8%
22.1%
18.1%
40.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
20
40
60
80
100
120
140
2010 2011 2012 2013 2014 2015
Number of Outlet Stores in Mainland China
Number (unit) Growth Rate
Source:Bain & Company, China Luxury Market 2015
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Up to the end of 2015, the number of Armani stores reached the highest at 145 among some
luxury brands in mainland China. Next came COACH and HUGO BOSS. Moreover, some brands
began to close the stores, and held cautious attitude in new stores’ expansion.
154
136
115
115
111
74
60
60
56
56
55
45
44
40
36
36
36
33
30
28
22
22
12 11
Armani
COACH
HUGO BOSS
Montblanc
Dunhill
Ferragamo
Bally
CUCCI
Michael Kros
Zegna
Burberry
Bottega Veneta
LOUIS VUITTON
PRADA
Cartier
MCM
Versace
D&G
Tiffany
BVLGARI
Dior
HERMES
Tory Burch
CHANEL
The Number of Luxury Stores in Mainland China (2015)
Source:Bain & Company, China Luxury Market 2015
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With the rapid development of Internet, Chinese consumers relied on Internet and App to get
luxury information. Among all Internet access, official websites and news websites were the most
popular channels to obtain luxury information. However, Weibo and App has sprung up in offering
luxury information.
78%
31%
29%
20%
8%
7%
Internet & App
Magazine
Friend
Salesmen in Stores
TV Ads
Access to Get Luxury Information for Mainland Chinese Consumers
60%
37%
31%
30%
29%
28%
9%
9%
Official Websites
News Websites
App
Celebrity Blog
BBS Forum
Video
Internet Access to Get Luxury Information for Mainland Chinese Consumers
Growth rate
2015 vs 2014
+3%
-4%
+1%
-2%
-1%
-2%
Growth rate
2015 vs 2014
-10%
-4%
+9%
+6%
+2%
+5%
0%
0%
Source:Bain & Company, China Luxury Market 2015
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China’s luxury consumers tend to be more willing to consume in entertainment industry. Compared
with 2014, more consumers would choose experiential luxury consumption in 2015, and the
consumption in luxury hotel and resort marked the highest proportion.
55%
36%
28%25%
8%
58%
37%
33% 33%
9%
0%
10%
20%
30%
40%
50%
60%
70%
Luxury Hotel & Resort Luxury Spa High-level Tourism Luxury Cruise Private Charter Service
Proportion of Consumers Choosing Experiential Luxury Consumption in China
2014 2015
Source:Bain & Company, China Luxury Market 2015
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An increasing number of high-net-worth individuals, consumption upgrade, and higher standard of
China’s luxury industry had brought positive influence in China’s luxury industry.
Clothing
Under the condition of
e-commerce, the third-
party luxury e-
commerce and its
value-added service
will become the
consumptive growth
point in luxury clothing
industry.
Food
With the innovation of
technology and the
deepening of human
cognition, the
innovation of health
products will show a
direction for how high-
end food should
develop.
Housing
Intelligent furniture will
become the
consumption growth
point in luxury home
decoration.
Transportation
Aircraft leasing will
play a leading role in
rental market.
Entertainment
High-level tourism will
be the breakthrough
in tourism industry.
Meanwhile, customized
route of high-level
tourism will further cater
to the consumption
concept of tourists.
1 2 3 4 5
Source:Zero2IPO Research, China Luxury Industry Report 2015
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According to Zero2IPO Research, the investment amount in China’s luxury industry was in uptrend
in 2015. Clothing shelter and entertainment accounted for the largest proportion with 55.2% and
24% respectively.
Source:Zero2IPO Research, China Luxury Industry Report 2015
3.4
2.5
3.3 3.4
2.8
3.8
0
1
2
3
4
5
2010 2011 2012 2013 2014 2015
Investment Scale in China’ s Luxury Industry
Investment(CNY billion)
Clothing Shelter, 55.2%
Entertainment, 24.0%
Housing, 19.7%
Transportation, 0.9%
Food, 0.2%
Investment in Segmented Market of China’s Luxury Industry (2015)
Intending to Purchase, 90%
Not Intending to Purchase, 10%
Purchasing Intention of Chinese Consumers on Luxury Goods for the Next Year(2015)
Source:FT China, Luxury Market Report 2015
10% of consumers who purchased luxury goods last year had no intention to buy luxury goods
next year. Percentage of consumers who intend to spend over 50 thousand RMB on luxury goods
didn’t change much, and percentage of people spending below 50 thousand RMB increased.
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