PARIS — While Chinese Millennials are generally believed to hold the key to growth for luxury brands in the next decade, a new study suggests it is a more narrow category of professional women in their late 20s and early 30s that they should be courting.
A research team at the Institut Français de la Mode, or IFM, spent a year studying female Chinese consumers aged between 18 and 55. The Millennial segment, aged 18 to 35, accounts for 68 percent of Chinese consumers, according to a separate report by Boston Consulting Group in partnership with social media platform Tencent.
The IFM study found that although the spotlight is on digital-savvy 18- to 25-year-olds, brands wanting to capture a chunk of the Chinese market should cater to the other end of the Millennial spectrum.
“It’s true that the younger generation of Millennials are big consumers, and there is a whole historical and sociological context to explain it,” said Catherine Ho, who conducted the 150-page study. “But often other categories of female consumers are overlooked.”
Led by Ho, who has a background in anthropology, the IFM team spent three weeks interviewing female consumers in Beijing.
“There are a lot of studies on China as a market, choosing the angle of global economy,” Ho said. “We wanted to get to know the Chinese consumer better and not just through what she chooses to buy — her aspirations, her needs, the differences between the generations, as well as what is in her closet.”
Out of the 30 women interviewed, the group with the strongest spending power were women in their late 20s and early 30s, who have climbed the career ladder and have a need for clothes and accessories that can reflect their new social status.
They can spend up to $200 per month on fashion, which compares with a maximum of $100 for Chinese women aged 45 to 55.
“These women have witnessed the evolution of China and its perception of femininity, departing from the idea of repressed womanhood that prevailed for their mothers under Maoism,” Ho said. “They grew up at a time where China opened its borders and were instilled with the idea that they needed to succeed and improve their social condition.”
These consumers perceive clothes as a symbol for social status. “They are avid consumers, because they are living a crucial moment in their personal life: they have high-powered jobs and are on the lookout for luxury brands that could mirror their empowerment,” she added.
By 2025, Chinese consumers will represent 40 percent of the global luxury market and contribute 70 percent of the sector’s growth, according to the BCG report.
The IFM’s “Women’s Wear in China” report also looked at the popularity of Chinese brands on the domestic market, with a focus on luxury creative brands that have a high social media following and a developed net of retailers. It singled out 25 brands based on net revenue and the number of times they were mentioned by participants.
“The idea wasn’t to just get the women we interviewed to name brands,” Ho said. “We wanted to underline the connections between them and spot the occasions on which these brands are worn.”
One brand that came up in each interview was Chictopia, created by Christine Lau. Launched in 2008, it took off in 2013. Like a lot of independent brands, it first existed on Taobao, an e-commerce web site operated by Alibaba, going on to open stores in the country’s biggest cities: Beijing, Shanghai, Chengdu and Shenzen.
The brand references Chinese classical art in its designs, with prices on the higher end of the spectrum. Participants in the study cited its use of bright colors and tongue-in-cheek designs.
Lau trained at Central Saint Martins in London before moving back to China to launch her brand. “In the last 10 years, there has been a real boom of young Chinese designers who trained in the fashion capitals, then chose to bring their knowledge back home, where they feel closer to their customer base,” Ho said.
Another popular brand is Icicle. Founded in 1997, it is one of the few Chinese fashion houses looking to expand overseas, with reports suggesting it will soon acquire French house Carven. Icicle recently opened a Paris studio to develop a Made in Paris line sold worldwide, but focusing mainly on providing the domestic market with high-end Chinese fashion with a French flair.
“We wanted to understand how Chinese brands positioned themselves at their time of creation and what needs they came to fill, so that international brands thinking of expanding to the Chinese market could become more familiar with the situation,” Ho said.
The study also mentions the international brands favored by Chinese consumers: Zara, Uniqlo, Muji and Gucci regularly came up during the interviews.
In 2016, China spent $269 billion on apparel, compared with $353 billion in the European Union and $331 billion in the U.S., according to the IFM. This number is expected to rise to $400 billion by 2025, which would overtake both the EU, at a projected $386 billion, and the U.S., with a forecast $396 billion.
This boom takes into account the stabilization of the country’s growth rate. “China’s growth rate is a lot higher than in the EU or the U.S., but it’s important to note that it has decreased since 2012,” said Gildas Minvielle, director of the Economic Observatory at the IFM. “Nowadays, the growth rate is between 4 and 5 percent.”