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Back to News 22/05/2018

China’s under-30s shoppers to drive decade of luxury consumption

If there is one thing that defines Generation Z and their older counterparts, the millennials, it’s an eye for fashion and an appreciation for excellent design. People under 30 are a driving force in the world of luxury consumption in many corners of the globe, and they are no less so in China. In 2017, almost half of China’s luxury shoppers were under 30. This interesting fact was a takeaway from the “China Luxury E-Commerce Whitebook” produced by Deloitte and luxury brand, Seeco which also identified China and America as being the two largest luxury markets. The report highlights that behind this luxury shopping is the fact that China’s Gen Z and millennials currently account for 34 percent of China’s disposable income which is forecast to increase to 50 percent by 2025.

A young and wealthy population, ready to spend, is building an enviable luxury marketplace in China and this is evident in the following areas:

From West to East: luxury apparel and fashion in China

Sales of luxury apparel, footwear, jewelry, and watches, are booming in China. Luxury brand companies from western countries are entering the Chinese market attracted by the disposable income of the under 30s and the Chinese government reducing the import duties on luxury categories, including cosmetics and apparel. Western fashion houses want to capitalize on young consumers with money to spend on beautiful things. This is also evidenced by Chinese investors buying up shares in luxury western brands such as BCBG Max Azria Group and Karl Lagerfeld to get in on the movement.

Fashion-based ‘events’ are also being held by luxury brands including fashion house, Vetements, who recently had a ‘pop-up’ event in Kowloon’s Kai Tak Cruise Terminal. The brand awareness of Chinese youth is also driving new collaborations between luxury brands like Louis Vuitton and streetwear.  

Shopping village till you drop

It isn’t just in mainland China that the under 30s are spending their cash. Shopping villages are being built, not just as places to buy goods, but as an “all-round experience as if in a luxurious hotel”. The Chinese Generation Z and millennials are gathering in shopping villages both on mainland China but also travel to Europe where retail villages are also growing. Chinese tourists are changing the luxury retail landscape.

Gen Z - The impulse buyers

Social media and online sales have created their own trend of impulse buying. According to Accenture, the global average for purchases made using social media is 44% of total sales, in China this figure is 70%. Young Chinese people love to buy goods via social media - and the purchase is a swift ‘click to buy’.

Under 30s in love with online shopping

It makes sense that the under 30s, as digital natives, will choose to shop online. And this ‘click to buy’ ethos pervades Chinese youth who are more likely than any other age group to purchase luxury goods online. According to the Seeco report, the average age of the online luxury goods shopper in China is 25. Luxury good brands like Seeco, Mei.com, and 5Lux recognize this trend and are creating exciting e-commerce platform experiences for their young shoppers.

Social media movement influence

The number of users of social media networks in China is predicted to be 725 million by 2022 with the 16-25 age group being the most avid users. The most popular social media app in China is WeChat and sales associates from luxury brands are using the app to engage with consumers directly to encourage a sale. Social media is being used in China, as well as elsewhere, to build holistic customer experiences, developing brand awareness, loyalty, and relationships, by reaching out directly to the consumer. As social media is an inherent part of the life history of an under 30, this medium is a natural extension of the buying experience.

The right skills for the global marketplace

The management and marketing of luxury goods and luxury brands requires a high level of specialist knowledge and understanding of markets. Each country has its buying culture, and this influences how you approach brand awareness and sales campaigns within that region.

emlyon business school’s MSc in Luxury Management & Marketing has been designed to ensure you have the tools of the luxury fashion, lifestyle, and design trade at your fingertips. The course gives you the practical knowledge and skills needed to build a successful career in the luxury brand space. It will take you to Paris, London or New-York and Shanghai providing students with the necessary knowledge to master the luxury business dynamics all over the world.

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