“China Retailers Shift from Ostentatious” (Financial Times)
As anticipated, the effects of the Xi administration’s crackdown on conspicuous spending are disproportionately punishing urban retailers and service providers catering to high-level public servants. Vendors, from local independents to multi-national businesses, who may have overextended their reliance on the state-owned sector, should reconsider their target audience and shift focus towards the rising middle-class private sector.
“Think China’s Luxury Consumers Are All The Same? Think Again.” (Jing Daily)
BBDO’s Nick Cakebread compares and contrasts two types of Chinese luxury consumers, who jointly make up most of domestic luxury spending. Urban Middle-Class Aspirants he defines as the upwardly mobile set brimming with confident over their future earning power. They aim to project success through appearances and consequently rely on luxury brands for social signaling. Meanwhile The New Nobility are the “ultra-high-net-worth” — the established business, industrial and Communist Party elites who move discreetly in polite society. This group is more nationalistic and more interested in domestic luxury brands.
“China’s 2020 Consumer is in a Town You’ve Never Heard Of” (Reuters)
China’s household savings rate currently hovers around 28 percent, amongst the highest in the world. This culturally ingrained savings mentality, however, may not survive a generational shift, amidst decades of relative social stability and economic prosperity. With little sense of the risks their parents faced — and often themselves the beneficiaries of their parents’ austerity — ‘post-80s’ young Chinese are increasingly trading personal savings for increased discretionary spending. Reuters profiles two such young consumers: in their early twenties, living in a Tier 2 or 3 city with lower living costs, and earning between 3000-4000 RMB per month, most of which they funnel towards fulfilling their vision of a modern, consumption-driven lifestyle.
“Fashion You Can Touch” (China Daily)
On the tail end of recent Shanghai Fashion Week, online marketplace Taobao.com experimented with its first offline fashion show. Ten “Taobao brands” were selected from the more successful amongst the platform’s over 1.3 million independent e-boutiques. Names such OtherMix, Cutie Pigie, Lovefish and Amii may not resonate with consumers outside the Mainland, but they represent in value and positioning the equivalent of the Chinese ‘fast fashion’ establishment. Each of these top-selling labels, launched and marketed exclusively from their Taobao virtual storefronts, employs young local design teams to develop styles on a weekly basis. In aggregate, it’s estimated that tens of thousands of new designs are uploaded daily.
“Upcoming Dior Homme Beijing Show Continues Emphasis On Upscale Luxury” (Jing Daily)
To celebrate the reopening of its Seasons Place shop, Christian Dior SA is staging its first menswear show in China. The encore presentation of the house’s Autumn/Winter 2013 ready-to-wear Homme collection will take place on Thursday at the Central Academy of Fine Arts in Beijing and include a supplement of designs not previously shown in Paris. Affluent Chinese male shoppers are a key focus for international luxury brands. Studies by consulting companies including Bain & Co and McKinsey have documented their increasing appetites for designer apparel and accessories. And as these consumers are currently less likely to follow seasonal collections shown abroad, we are likely to see an influx of domestic events and media aimed at raising the profile of luxury menswear offerings.