Luxury...Women's Clothing Shoes Jewelry Men's Clothing Bags and Luggage Cosmetics, Perfume, Products...
Transcript of Luxury...Women's Clothing Shoes Jewelry Men's Clothing Bags and Luggage Cosmetics, Perfume, Products...
Luxury
© 2017 Beyond Summits
Summary:
• In 2016, China’s luxury goods consumption fell to the lowest since 2009, which was mainly due to
the slowdown in China’s economy. By 2025, it is expected that Chinese consumers will contribute
44% of global luxury market value, which is equivalent to the total sales volume of the US, UK,
France, Italy and Japan in 2016.
• Among all people searching for luxury goods, for age distribution, people aged 20-29 account
largest for about 45% of the total population.
• The participation of luxury consumers in digital channels continues to increase, and brands will
continue to increase their digital marketing-related budgets; some brands are testing and launching
online channels (through branded websites or third-party platforms).
© 2017 Beyond Summits
2
Source:Mckinsey & Company, China Luxury Report 2017
By 2025, the global market value of luxury goods will increase by 1 trillion yuan to 2.7 trillion yuan.
It is expected that Chinese consumers will contribute 44% of this amount, which is equivalent to
the total sales volume of the US, UK, France, Italy and Japan in 2016. .
© 2017 Beyond Summits
3
12% 21%
32% 36%
44% 1,111
1,171
1,142
1,389
1,512
0
500
1,000
1,500
2,000
2,500
3,000
2008 2012 2016 2020E 2025E
Chinese consumers’ Contribution to the Global Luxury Market Value (CNY trillion yuan)
Other GlobalConsumers
ChineseConsumers
1,263
1,482
1,679
2,170
2,700
+3%
Annually
(2016-
2025)
+9%
Annually
(2016-
2025)
106
116 115
113
0
20
40
60
80
100
120
140
2012 2013 2014 2015
China’s Luxury Market Scale (CNY billon yuan)
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 Scale by Products Category
Accessories
Women's Clothing
Shoes
Jewelry
Men's Clothing
Bags and Luggage
Cosmetics, Perfume,Products for PersonalUseWatches
Source:Bain & Company, China Luxury Market 2015
Mckinsey & Company, China Luxury Report 2017
In 2016, China’s luxury goods consumption fell to the lowest since 2009, which was mainly due to
the slowdown in China’s economy. Among them, the total consumption of luxury goods such as
watches, bags, and men's clothing dropped significantly.
© 2017 Beyond Summits
4
Source:Mckinsey & Company, China Luxury Report 2017
• Since 2015, China's luxury goods consumption has shifted from first-time consumption to
incremental consumption. Therefore, luxury investors should focus on fostering customer loyalty
instead of focusing on developing new customers.
• In addition, the consumption characteristics have also changed. The main consumers of luxury
goods in China have changed from high-income people (annual household income of 100,000
to 300,000 yuan) to rich people (annual household income of more than 300,000 yuan).
© 2017 Beyond Summits
5
60% Luxury consumption in 2007-2008 was from
First consumption
53% Luxury Consumption in 2015-2016 was from
Incremental consumption
68% Luxury consumption in 2008 was from
High-income people
88% Luxury consumption in 2016 was from
Rich people
© 2017 Beyond Summits
6
Luxury goods that Chinese consumed in Hong Kong and Macao showed a decline from 2014’s
18% to 12% in 2015. Yet the consumption for luxury goods in Japan increased significantly. The
price sensitivity of China's affluent people has led them to prefer shopping in department stores,
specialty stores and other official channels or duty-free shops.
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
Source:Bain & Company, China Luxury Market 2015 Note: Only for the consumers living in mainland China
Mckinsey & Company, China Luxury Report 2017
Downdown Duty-free Shop
Airport Duty-free Shop
Department Store
Brand Independent Store
Specialty Store in Shopping Center
Brand Independent Discount Store
Multi-brand Discount Shop
Online Shop
Chinese Rich People’s Preferred Shopping Channel
© 2017 Beyond Summits
7
6-8 years ago, rich people paid more attention to material quality and workmanship rather than
brand awareness. Nowadays, brand excellence (namely the global popularity of the brand ) has
become the main factor impacting the consumers to purchase the luxury goods.
Source:Mckinsey & Company, China Luxury Report 2017
1. Excellent Brand
2. Superior Material
3. Classic Style
4. Elegant Workmanship
5. Creative Design
1. Excellent Brand
2. Classic Style
3. Elegant Workmanship
4. Superior Material
5. Creative Design
1. Excellent Brand
2. Elegant Workmanship
3. Classic Style
4. Long History
5. Social Status
TOP 5 Factors Impacting Customers to Purchase Luxury Goods
© 2017 Beyond Summits
8
When Chinese rich people decided whether to go abroad to buy luxury goods, their first
consideration was price. In 2012, 60% of consumers were willing to accept a 20% spread, while
only 20% of them can tolerate it nowadays.
Source:Mckinsey & Company, China Luxury Report 2017
80%
75%
67%
64%
64%
55%
49%
Price
Novelty
Choice
Certified
Quality
Experience
Service
Chinese Rich People’s Consideration in Purchasing Luxury Goods Abroad
Source:Bain & Company, China Luxury Market 2015
© 2017 Beyond Summits
9
Cosmetics, Perfume,
Products for Personal
Use Watches
Bags and
Luggage Men’s Clothing
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 Women’s
Clothing
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
© 2017 Beyond Summits
10
From January to December in 2015,Baidu generated 1.78 million searches for luxury goods
every day. Among all people searching for luxury goods, for age distribution, people aged 20-29
account largest for about 45% of the total population.
Source:Baidu Index
0%
10%
20%
30%
40%
50%
60%
70%
≤19 years old 20-29 years old 30-39 years old 40-49 years old ≥ years old
Age Distribution of People Who Searched Luxury Goods in Baidu
© 2017 Beyond Summits
11
Among all luxury consumers in China, upstarts accounted for the largest proportion, followed by
metropolitan consumers and fashionistas.
Source:The Boston Consulting Group
12%
16%
7%
4%
6% 7%
8%
6%
22%
6%
0%
5%
10%
15%
20%
25%
Fashionista MetropolitanConsumer
Self-identity Experiencer Classic Lover Status Pursuer Social Wearer Absolute LuxuryConsumer
Upstarts Giver
Category of Luxury Consumers in China
© 2017 Beyond Summits
12
With the rapid development of the Internet in China, the main way for consumers to obtain luxury
goods information is mainly the Internet and applications, and the proportion is still growing.
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
© 2017 Beyond Summits
13
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. Among them,
the experiential consumption in luxury hotels and resorts accounted the largest proportion.
55%
36%
28% 25%
8%
58%
37%
33% 33%
9%
0%
10%
20%
30%
40%
50%
60%
70%
Luxury Hotels & Resorts 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
© 2017 Beyond Summits
14
An increasing number of high-end people, consumption upgrades, and China's norms for the
luxury goods industry all contribute positively to the overall luxury goods industry in China.
Clothing
Under the “Internet+”
e-commerce pattern,
the third-party luxury
e-commerce and its
value-added services
will become the
growth point for the
consumption of the
luxury clothing
industry in China.
Food
With the continuous
innovation of science
and technology and
the continuous
deepening of human
cognition, health
product innovation will
be the development
trend of high-end food.
Housing
Smart Home will
become the growth
point for luxury home
furnishing.
Transportation
Aircraft leasing will
play a leading role in
the future leasing
market.
Entertainment
High-end tourism will
become a consumption
breakthrough in the
tourism industry.
Meanwhile, the
customized route of
high-end tourism is
more in line with the
consumers’
consumption concept.
1 2 3 4 5
Source:Zero2IPO Research, China Luxury Industry Report 2015
© 2017 Beyond Summits
15
According to the data of Zero2IPO Group, in 2015, the overall investment in the domestic luxury
goods industry was on the rise. Among them, clothes and entertainment still accounted for the
largest proportions, reaching 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)
We have collaborating offices in
· SH · HK · TYO · SEL · SYD · MOS · BER · LON · PAR · ROM · NYC · SF ·
Visit our website to learn more: https://beyondsummits.com/
Your Global All-media Marketer