default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Report: 88% of China’s Luxury Growth Driven By New Consumers

A luxury shopper outside a Prada store in Chengdu
Physical retail remains vital to Chinese luxury fashion consumers of all ages. Shutterstock.

China’s luxury fashion market in 2021 is being propelled by a cohort of 1.5 million consumers who each spend more than 40,000 yuan ($6,255) per year on fashion-related luxury products. As a group, they are responsible for 81 percent of the sector’s total sales over the past 12 months, according to a new research report from consulting firm, Oliver Wyman.

The report, compiled in October after surveying 3,000 mainland luxury fashion consumers, in addition to completing supplementary interviews with luxury brand sales associates working closely with them, also found that 50 percent of this group bought luxury fashion items (including ready-to-wear, footwear, leather goods and accessories) for the first time between October 2020 and September 2021.

According to “The New Faces of Chinese Luxury Shoppers” report, it’s this surge in first-time luxury fashion consumers that will be responsible for 88 percent of China’s luxury fashion market growth in 2021.

“A lot of consumers who might have spent [money] on travelling before other things, especially younger Gen-Z consumers, have instead entered the luxury category,” said Imke Wouters, retail and consumer goods partner at Oliver Wyman, adding that 40 percent of the first-time luxury consumers surveyed were under 25-years-old.

These younger Chinese consumers differ from their predecessors in terms of how they first purchase luxury. Whereas a decade ago, Oliver Wyman retail and consumer goods principle, Katie Sham, says “99 percent” of Chinese luxury consumers would have first purchased leather goods, today’s Gen-Z consumers are more likely to first buy a ready-to-wear item.

“We’re not talking about a very expensive jacket from Chanel or evening gown from Dior, we are talking about a signature T-shirt,” Sham explained, or other items in a price point below 10,000 yuan ($1,564).

Chanel and Dior were the most desired brands among Gen-Z overall (cited by 45 percent and 38 percent of respondents respectively), though Chinese designer brands were also in the mix, and 11 percent of respondents named local brand Shushu/Tong as a desired option.

Another stand out from the report that will be vital to luxury brand success in the China market is the importance of sales associates, who were especially important to Gen-Z consumers as a major point-of-contact with brands.

“In China, where guanxi is so important, the sales assistant is the most personal and impactful way for the brands to connect with the customers,” Sham said. “For brands, it’s critical for them to think about how much autonomy they want to give this sales associate versus [controlling their brand image].”

Learn more:

The Biggest Mistakes Luxury Brands Make in China

China is the world’s most important luxury market, but key business decisions concerning the country are still taken by Western executives based in Europe, resulting in common and costly mistakes.

In This Article
Topics

© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.