Ruder Finn, one of the world’s largest independent public relations firms, and IPSOS Group, the third largest market research company in the world, have released the sixth edition of the 2015 China Luxury Forecast, providing analysis of key trends in the luxury sector in mainland China and Hong Kong.
The report reveals that overall market dynamics are unchanged and consumer confidence remains high, attributing the slowdown observed by many luxury brands in the China market to a shift in the spending patterns of Chinese luxury shoppers. Travel is now the number one category of luxury for Chinese consumers, and spending by Chinese travelers is expected to drive more growth in luxury markets outside China. The rise of e-commerce represents both the next major challenge and opportunity for luxury brands.
Surveying 1,933 consumers across mainland China and Hong Kong, the 2015 China Luxury Forecast covers Greater China in depth, with 1,616 consumers from over 14 major cities in China and 317 consumers from the Hong Kong Special Administrative Region. 30 percent of mainland consumers were from first tier cities, 38 percent from second tier cities, and 32% from third tier cities. A large majority of mainland consumers said they would spend more, or at least the same, on luxury in the next year. Although consumers in Hong Kong were more conservative than their mainland counterparts, 52-62 percent still reported that they would spend the same on luxury in the next year, and 18-38 percent said they planned to spend more.
With the growth of outbound travel, the report predicts that Chinese consumers will continue to drive growth in overseas luxury markets. Duty free shopping is becoming a leading distribution channel for luxury goods, with 53 percent of mainland consumers shopping at duty free stores in the past year. The vast majority of Chinese consumers are dissatisfied with luxury retail services in mainland China – only 19 percent of mainland Chinese consumers and 10 percent Hong Kong consumers said they were very satisfied with luxury retail services in mainland China. Satisfaction with luxury retail services was comparatively higher in Hong Kong; however, here again less than half of consumers (49 percent in mainland China and 36 percent in Hong Kong) indicated they were highly satisfied.