Following a slow start to luxury sales in China due to Covid-19 lockdowns, spending on luxury in the country has rebounded strongly as restrictions to global travel have pushed Chinese consumers to make luxury purchases domestically rather than abroad, according to a research report, titled China\u2019s Unstoppable 2020 Luxury Market, published by Bain & Company and Tmall Luxury Division.<\/p>\n\n\n\n
There were variations in growth across categories, with jewellery and leather goods leading the way at a rate of about 70-80%, ready-to-wear clothing and shoes growing about 40-50% and high-end watch purchases increasing by about 20%.<\/p>\n\n\n\n
Brands are also carrying out loads of offline activities, such as fine jewellery exhibitions and fashion shows, invitation-only product presentations, pop-up stores for seasonal collections, flagship launches and themed caf\u00e9s. These offline events often hire celebrities and are frequently accompanied by simultaneous online activation through key opinion leaders to create buzz. However, online and offline marketing activation at the current scale is extremely costly and is a primary driver of the performance gap between larger and smaller brands, Bain noted.<\/p>\n\n\n\n
Growth for the mainland China luxury market is expected to climb by 48% to reach almost RMB346 billion by the year-end. The global luxury market shrank by 23% in 2020, however mainland China\u2019s market share nearly doubled, growing from about 11% last year to 20% in 2020. This growth is likely to continue, putting the country on track to claim the biggest share of the global luxury market by 2025\u2014even after the world economy returns to pre-pandemic levels.<\/p>\n\n\n\n
\u201cThrough the Covid-19 pandemic, we have seen the global luxury goods market shrink, as economic and social considerations have limited access. However, the mainland China market has rebounded post-lockdowns due to four engines: further repatriation, Millennial and Gen Z shoppers, continuing digitalisation and the Hainan duty-free stores \u2013 a new factor with a key role in this year\u2019s growth,\u201d said Bruno Lannes, a Bain & Company senior partner based in Shanghai and one of the report\u2019s co-authors.<\/p>\n\n\n\n
\u201cOne of the most exciting trends to come out of the luxury market in 2020 has been the ways that brands have actively developed and strengthened their connections to consumers both online and offline,\u201d said Chris Tung, Chief Marketing Officer of Alibaba Group. \u201cChinese luxury consumers are digitally native, highly sophisticated and expect an elevated shopping experience. Global luxury brands have embraced new digital tools such as livestreaming for consumer education or product presentation. During this year\u2019s 11.11 Global Shopping Festival, luxury brands attracted millions of views and interactions in a matter of hours as consumers looked for new, digitally-enabled ways to connect with their favorite brands.\u201d<\/p>\n\n\n\n
Global conditions are unlikely to return to normal before 2022 or even 2023, the report informed. Chinese consumers are also likely to remain cautious about international travel even after borders reopen. As a result, most luxury brands believe that domestic growth will continue in 2021 at about a 30% level.<\/p>\n\n\n\n
\u201cMany brands are showing a stronger commitment to a comprehensive digital strategy, including a presence on all key digital channels,\u201d said Carrie Zhang, a Bain & Company partner based in Shanghai and one of the report\u2019s co-authors. \u201cMoreover, luxury brands are now instilling sophistication, quality and attention to detail\u2014core components of luxury players\u2019 engagement strategies that did not fully transfer when brands first rushed to digital\u2014into these new engagements.\u201d<\/p>\n\n\n\n
Photo credit: TonyV3112 \/ Shutterstock.com<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Following a slow start to luxury sales in China due to Covid-19 lockdowns, spending on luxury in the country has rebounded strongly as restrictions to global travel have pushed Chinese consumers to make luxury purchases domestically rather than abroad, according to a research report, titled China\u2019s Unstoppable 2020 Luxury Market, published by Bain & Company…<\/p>\n","protected":false},"author":1,"featured_media":6216,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[83],"tags":[],"thb-sponsors":[],"class_list":["post-6215","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bulletin"],"acf":[],"yoast_head":"\n