PARIS — Luxury firms need to act fast if they don’t want the rapidly evolving Chinese consumer to join the ranks of those disillusioned with their brands, consultancy Bain & Co. warned in a new survey.
The behavior of Chinese consumers is replicating the developments seen in more mature markets, but at a much faster pace, Bain analysts Claudia D’Arpizio and Federica Levato said in their study, “Lens on the Worldwide Luxury Consumer,” presented here Monday.
The hard core of luxury consumers — meaning those that spend at least 1,250 euros, or $1,700 at current exchange, a year on luxury goods — totals 150 million worldwide (with the top 10 percent accounting for more than half the spending), according to the survey, produced in partnership with equities broker Redburn and research agency Millward Brown.
The analysts classified these by seven types in declining order per total spending: Omnivore, opinionated, conservative, investor, hedonist, disillusioned and wannabe.
The omnivore category consisted mainly of Chinese consumers from second- and third-tier cities, while the opinionated section included Chinese living in Beijing and Shanghai, followed by Western Europeans and Americans.
One of the biggest surprises of the survey was the rapid transition of Chinese consumers from omnivore to opinionated over the last 18 to 24 months, said D’Arpizio, a partner at Bain.
“I think it’s pretty scary — it was scary for us, but I think more scary for [luxury brands] — to see how the Chinese changed the way they were consuming luxury goods in a few months. They were really omnivore, and buying the big brands and buying in a very bulimic way, and became very quickly opinionated cherry pickers, more sophisticated,” she explained.
“After all the investments made by the industry in China, I think it’s very interesting to study the speed at which these things change now. It’s 10 times or more higher than it was 10 years ago, so everything is happening very quickly,” D’Arpizio added.
Meanwhile, a group of disillusioned consumers has emerged over the last decade in mature markets such as the U.S., Europe and especially Japan, with price increases factoring heavily into their disaffection.
“We don’t think this is a journey that every mature market has to follow. We think that Japan should be a big test market to really understand how consumers ended up there. Of course, there have been a lot of exogenous events and the crisis, but also probably the brands have invested so much in Japan, but at a certain point, probably not in the right way,” said D’Arpizio.
“So the question is: Is it a journey, or can you do something to stop the cycle and not have the Chinese becoming detached very soon?” she asked.
China and Southeast Asia will remain the main drivers of luxury spending in the next five to 10 years, with an estimated 10 million new consumers entering the market every year, she forecast.
The survey recommended that brands develop more tailored responses to each of their customer segments, with key measures such as developing increasingly differentiated products, more distinctive advertising campaigns and a less formal in-store experience.
“What is clear is the ability of luxury brands of being so strong and very focused on creating big desire and making people fall in love, but then the real relationship after the purchase and during the journey still has huge margins for improvement,” said D’Arpizio.
“Consumers really ask for more of a complete journey with the brand and more of a relationship across all the touch points, and not just the moment of the advertising and creating the desire,” she concluded.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye