BEIJING — In just a single generation, China's consumers have become part of the world's top-tier spenders in terms of travel retail and the market's dynamics are continuing to evolve at a rapid pace, according to participants at a Tax-Free World Association (TFWA) conference here this week.
Andrew Wu, LVMH Moët Hennessy Louis Vuitton group president for Greater China, discussed China's astonishing transformation from poor country to a nation filled with new wealth in just a few decades. With that wealth has followed a strong surge in consumer demand, thanks in part to economic reforms, and travel shopping has seen a major boost.
Wu said material possessions are "critically important for most Chinese people. China is moving rapidly from rags to riches to what I would call quality of life."
He said retailers looking for customers in China must be mindful of the speed of change here and the ease by which Chinese consumers are able to adapt to new trends and tastes.
Consumer spending in China has quadrupled in the past 10 years, and the country is quickly becoming urbanized, with more than half the population now living in cities. That's compared with an urban population of less than 10 percent just 40 years ago.
Youth is also a critical factor for companies to consider when looking at China's market, said Wu, noting that 43 percent of the population was born after 1980. Among his staggering statistics, Wu also pointed out that overseas travel and study has exploded in the past decade. During the two decades from 1978-97, 288,000 Chinese students had studied in other countries. Contrast that with the 410,000 who studied overseas just last year alone.
"That's a generation who have never known anything but economic growth. That's who we have to deal with," said Wu. "China is now in a continuous tidal wave of youth."
Wu and several other speakers also warned their audience to remember that China is not a single entity or unified consumer market. Rather, the experts said, it is more useful to look at China through the same lens of Europe-unifying characteristics, but vast regional, ethnic and economic differences fragment the country's consumer markets.
"Don't treat China as a single entity," cautioned Andrew Stockwell, vice president for Asia Pacific at Forrester Research.
Stockwell joined a panel that explored how Chinese consumers use the internet and social media, and what that means for brands and retailers.
Viveca Chan, chief executive of the WE Marketing Group, a Chinese branding consultancy, said that Chinese consumers now account for 25 percent of global luxury goods purchases. That means Chinese travelers have buying power and are willing to, and frequently plan to, spend on high-end items while on the road.
At the same time, social media offers a huge opportunity for companies looking to reach those consumers. In a survey her firm did, Chan said 58 percent of Chinese consumers research online about companies before making serious purchases. Consumers look to social media for advice, as knowledge is lacking in older generations who weren't so cash-rich and a generation of only children. So shoppers turn to Weibo and other social media services before buying.
Chan said airport retailers should offer on-site, online promotions to shoppers to lure them in, and then personalize the experience. China's high-end consumers are also younger; the average Chinese millionaire is just 39, compared with the 64-year-old average American millionaire.
These young, savvy rich also travel and want to spend, but often, they prefer to do so at downtown stores. China's airports have left its consumers with poor impressions of price and variety in airport shopping.
"One thing we really need to do is entice Chinese travellers to choose to shop and spend in the airport," said Chan.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast