Wealthy Chinese Luxury Buyers Are, On Average, 15-20 Years Younger Than In America, Even More In Japan
One of the interesting aspects of the booming Chinese luxury business is the relatively young age of the average Chinese luxury consumer. While there are many theories why Chinese luxury buyers tend to be younger than their Japanese or American counterparts — e.g., spending their thrifty parents’ money, changing attitudes about consumption, a “luxury-as-success” mentality in the younger generation — the only cut-and-dry data we can fall back on is statistics. As we wrote recently, the younger age of wealthy Chinese presents a huge opportunity for – but often a major challenge to — luxury brands, most of which have based their brand identity around catering to slightly older buyers. A New York Times article about the Chinese luxury market put the age issue into perspective:
The average age of someone with 100 million yuan, or about $15 million, is 43. The approximately 825,000 Chinese with personal wealth of 10 million yuan are on average as young as 39, according to [data from the Hurun Report] — again, about 15 years younger than their counterparts in America or Europe.
What should luxury brands make of these nearly 1 million relatively young, wealthy, Chinese luxury shopaholics? The first, and most obvious thing, is to cater products and advertising in the China market for them. Many brands, like Cartier and Hermes, have already started to do that, and if the Hurun Report’s latest “Best of the Best” report is any indication, this “40-something” marketing strategy is paying off.
Another good — if obvious — way to learn about Chinese luxury consumers is to simply keep an eye on the Chinese-language luxury-focused media, since they’re most attuned to trends that have a deep cultural flavor. Today, Chinese men’s lifestyle blog Junzi Men has a very informative post about Chinese “young tycoons” going on lavish Hong Kong shopping sprees, which also covers the growing influence of the Chinese luxury industry and interesting cultural aspects about mainland luxury fans. Translation by Jing Daily team:
Near Harbor City, in Hong Kong’s Tsim Sha Tsui district, one can hear their accents – on the street, in shopping malls, everywhere you go there they are, the shopping-mad mainland luxury buyers. The nickname Hong Kongers have given to mainland visitors — “Hawks” (a transliteration of the literal “luxury shopper”, “hao ke” – JD) — is well founded. For lots of mainland tourists, the places they’re most interested are Hong Kong’s shopping malls, rather than Disneyland. In malls on Guangdong Road, the mainland tourists you see are generally dressed to the nines. Lots of them are decked out from head to toe in well-known international brands — Chanel sunglasses, LV handbags, Gucci shoes…that kind of style, well, it’s enough to make native Hong Kongers who occasionally wear one or two famous brands green with envy.
Experts predict that China’s luxury market will reach US$14.6 billion within five years to become the world’s largest luxury goods trade and consumption hub.
It’s not only consumer desire that’s expanding, every major luxury brand is also vying for young consumers in China. In preparation for the 2010 World Expo in Shanghai, lots of luxury brands have opened new flagship stores or refurbished existing locations. For example, Louis Vuitton selected a new flagship store location in Shanghai, the Swatch Group has invested heavily, the Shanghai Peace Hotel will be renovated before the Expo, stores are being transformed, and so on. This spring, Hermes will create a new brand made specially for the Chinese market, “Shang Xia.”
Commercialization made rapid development possible, but also made a rich material life possible. Changes in the structure of China’s population accelerated this development even more. The one-child policy meant that every child had more disposable income. At the same time, the development of the Internet in China cut down on the communication barriers to Western culture, and substantially increased Chinese young people’s knowledge about famous foreign brands.
With rising incomes, people generally perceive luxury goods as a symbol of identity and status, and nowadays young people see consumption of luxury goods as a way to take their “destiny” into their own hands. Guangdong media worker “Ms. Zheng” recently told a reporter, “Generally, on weekends I’ll go to La Perle (A Guangzhou luxury shopping mall), and when I see something I like I’ll buy it. Price isn’t an issue — if the quality’s good, that’s what’s most important. If you buy a famous luxury brand that is both fancy and durable, you’re basically spending $2,000 on a bag that’ll last 10 years. The quality is way better than just buying a cheap, typical bag that you’ll use for a while then toss away.”