SHANGHAI — The luxury market in China is expected to regain momentum in 2014 as Mainland consumer tastes and spending habits continue to become more sophisticated, according to a new luxury forecast released by communications agency Ruder Finn in partnership with Ipsos Group, a market research firm.
The sales of luxury goods have slumped in China in recent months amidst slowing economic growth in the country and a government-led antigraft campaign, which has curtailed the purchase of high-priced goods as bribes between officials and their business associates.
Mainland Chinese are willing to spend more on fashion and beauty, a trend that will “likely increase in the year 2014,” the forecast said. The study predicts that consumption for watches, bags, jewelry and shoes will remain the same as in 2013.
“The luxury market in Hong Kong continues to be a challenge because the consumption intention in 2014 remains the same as in 2013,” said Simon Tye, executive director of Ipsos. “The Hong Kong consumer continues to challenge the retailer in providing value when shopping for luxury, whereas in China, the demand for luxury is still strong, particularly in fashion and beauty.”
Chinese consumers increasingly care less about brand names and more about the uniqueness of products, the study said. It also found that Mainland shoppers care more about customer service, with 92 percent of those surveyed expressing dissatisfaction with service offered by luxury brands within China, which is fueling more purchases overseas.
“As the market matures, Chinese consumers are becoming more and more knowledgeable about the different luxury categories and offerings,” Elan Shou, managing director and senior vice president of Ruder Finn China, said. “They are looking for experiences that truly reflect their discerning expectations. For now, they are finding these luxurious shopping experiences overseas.”
Nearly 40 percent of Chinese surveyed said they are turning to the Internet for luxury shopping, representing a 22 percent increase compared with 2012. Mobile platforms are also becoming an important way to connect with consumers, with 80 percent of respondents willing to receive push notifications on mobile devices from brands, the 2014 China Luxury Forecast said. More than 40 percent of those surveyed said they have downloaded mobile apps from brands.
Trust is still the deciding factor as to whether Mainland consumers will pay for high-priced items online. For Chinese shoppers, social content is one of the key factors to build confidence in e-commerce purchases. Younger consumers are a main driver of growth for purchases of luxury goods on the Internet, the forecast said.