Today, China is an undoubtedly important market for luxury brands. This is supported by the fact that there are almost 3 million luxury consumers in Mainland China. These Chinese luxury consumers can be broken down into two distinct categories: Luxury and Super Luxury consumers. Luxury consumers are those who have spent $1 million in personal wealth, while the aptly named Super Luxury consumers have spent at least $10 million.Seeking out internationally recognised and lauded brands, the likes of Louis Vuitton, Hermes, Tiffany & Co. and Apple have profited from the expanding Chinese luxury market. China’s increasing purchasing power, a rise in disposable income, and a quickly growing middle class have largely spurred the expansion of this market. However, while Chinese consumers have been fuelling the luxury market, they often aren’t making luxury purchases in China. In fact, newspaper China Daily recently reported that 76% of China’s luxury consumption happens overseas. Due to lower prices abroad, there is a tendency among Chinese luxury consumers to make purchases while overseas, whether it is in other Asian countries like Japan and South Korea or in Western countries like the UK and USA.While luxury products sold outside of China can be as much as 40% cheaper than those sold inside China, this is not the only reason Chinese consumers purchase high-end goods outside of their home country. For Chinese consumers, buying high-end products from developed countries or their origin country displays prestige and superiority. The influence of Western lifestyles has also led to the belief that foreign brands and products made in a developed country are better quality. In fact, Global Blue, a retail-tourism company, found that purchasing luxury brands was a crucial part of travel plans for many global Chinese travellers.
Reaching Chinese Luxury Consumers in China
However, Chinese consumers aren’t buying luxury products at the spur of the moment while travelling abroad. On the contrary, most of them are doing thorough research prior to purchasing luxury products in other countries. This change in consumer behaviour represents a major challenge for Western brands. Since Chinese consumers are now making purchasing decisions before they leave China, brands need to respond by reaching customers at this crucial point.
One of the most common ways for brands to connect with consumers is through social media. However, this can prove difficult for Western brands in the Chinese market since China blocks popular Western media platforms like Facebook, Twitter, Instagram and YouTube. So what’s a brand to do?
More and more Western brands are fully embracing Chinese social media platforms, such as Weibo and WeChat, to take advantage of the lucrative Chinese market. For example, iconic British luxury brand Mulberry created a WeChat account and uses it to provide exclusive content to curious consumers. Similarly, classic American luxury brand Tiffany & Co. operates a Weibo account where they strive to associate themselves with Chinese celebrities and establish themselves as a leading jewellery brand. And with Chinese luxury consumers making purchasing decisions while still in China, look for an increasing amount of high-end brands to open up Chinese social media accounts.
