A new trend in China : still going for luxury, but less flashy

Beware : China luxury market is getting more complicated

The new Chinese customers want to distinguish themselves. China is the luxury eldorado for all the brands in the world that wat to sell luxury goods. Recently, the market has turned slightly more sophistocated. The fist reason is the fight agains civil servants luxury habits that have been a shock to the public opinion in China.

It is now not so advisable for these people to show off their luxury brands. Expensive watches and luxury alcohols are not so fashionable anymore. For luxury watches, the market growth has only been 7% in 2012 compared with 30% in 2011, so far 2013 is confoting thi trend.

Another problem is tax fees for imported goods. 57% of the Chinese citizens have bought their luxury goods abroad, not in China, and to add complexity, 27% of the purchases have been made by third partiy people living abroad.

The definitive figure is that only 20% of the luxury purchases made by Chinese people have been made in mainland China.

A fashion of discretion

According by a survey made by Bains&co, 65% of Chinese consumers living in Beijing and Shanghai now prefer brands with logos that are not that easy to see. The trend is probably to get even more important since the young generation pays even more attention to brands that are significant with there personnalty instead of flashy brands.

For example, the new Peugeot brand DS is panning to capitalize on this new trend.

If there is a market that symbobilizes China’s access to luxury goods, this market is smartphones.

The iphone is not dominant anymore in this market. Consulers get more sophisticated and want to distinguish themselves through their purchasing behaviour.

It’s just a trend, the potential market still longs for flashy brands

Still, this comment has to be mitigated. The Chinese middle class is growing, new people are gaining their access to the luxury market every day, and there is still the vast majority of Chinese people waiting to do so, as a huge potential. But these segmets of the markets are still very much attached to the flashy brands with large logos. So there is the beginning of a new purchasing cultuire as the market is becoming more mature, but brands that are designed to show off are still something with a future in China.

Sources :

Le Temps

The Economist

Cadeau pour tous

Marketing China

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