As China’s luxury market continues its evolution, 2024 presents a dynamic landscape shaped by shifting consumer demographics, evolving purchasing behaviours, and significant outbound shopping trends. The latest "2024 China Luxury Brands Market Insight Report" unveils several key trends and patterns influencing the industry. Here’s a deep dive into the core findings:
Annual Luxury Expenditures by Mainland Consumers
The annual luxury expenditure by mainland Chinese consumers in 2024 is projected to reach RMB 558 billion, marking a 1.5% growth compared to the previous year. This consistent increase underscores China’s crucial role in the global luxury market, which has contributed approximately 20-25% to global sales over the past five years.
One of the main drivers of this growth is the spending behaviour of consumers aged over 30, who have demonstrated higher per capita expenditure than younger groups. Older consumers’ spending is fuelled by increased income stability and a preference for premium, enduring products. In contrast, younger consumers (30 and below) account for a growing proportion of the luxury audience, yet their per capita spending has declined, reflecting their nascent purchasing power and evolving priorities.
New vs. Established Consumers: Demographic Shifts
The composition of luxury consumers in China is transforming. Established consumers continue to dominate the market, with high-value clients (spending RMB 300,000 annually or more) driving 45% of the market revenue. However, the influx of new consumers, particularly younger individuals, has slowed, requiring brands to refocus on nurturing and educating this demographic for long-term growth.
Younger consumers tend to prioritize versatile, multi-use luxury items, such as shoes, bags, and jewellery. These products not only serve functional needs but also align with their aspirations for status and individuality. Brands aiming to capture this segment must emphasize affordability, brand storytelling, and digital engagement.
Outbound Shopping Trends and Spending Distribution
The resurgence of outbound travel in 2024 has reignited Chinese consumers’ preference for overseas luxury shopping. Approximately 52% of mainland Chinese luxury shoppers made purchases abroad in the first half of 2024, a 16% increase in penetration compared to 2023.
Top Shopping Destinations
Hong Kong, Macau, and Taiwan remain the top destinations, attracting 57% of outbound shoppers.
Japan and South Korea have overtaken Southeast Asia as the second most popular regions, driven by favourable pricing, limited-edition products, and enhanced shopping experiences.
Other destinations, including Europe and North America, continue to appeal to affluent travellers seeking exclusive collections.
Why Chinese Consumers Shop Abroad
Price remains a pivotal factor, with many consumers highlighting cost savings of up to 40% for certain products. Other motivations include access to rare or limited-edition items, shorter waiting times, and guaranteed authenticity. These preferences reflect the gap in product availability and pricing between domestic and international markets, challenging brands to improve their local offerings.
Domestic vs. Overseas Shopping Influences
Despite the popularity of overseas shopping, a significant majority (80%) of consumers finalize their purchasing decisions within China before travelling. Online platforms play an instrumental role in shaping these decisions. Brand websites, e-commerce platforms, and social media channels, such as WeChat and Xiaohongshu, are pivotal in “planting the seed” for luxury purchases. Short video platforms and influencer content also contribute significantly to consumer engagement.
Major Consumer Touchpoints: What Inspires Luxury Purchases
In 2024, the key touchpoints driving consumer interest include:
Brand-Owned Digital Channels: Representing 86% of initial consumer interactions, these include official websites, WeChat mini-programs, and live streaming events.
E-commerce Platforms: Platforms such as Tmall Luxury Pavilion are the second most influential, reflecting the growing acceptance of online luxury purchases.
Social Media and Influencer Content: Posts from key opinion leaders (KOLs), celebrities, and user-generated content play a critical role in inspiring and validating purchasing decisions.
Offline Experiences: While online channels dominate initial interest, luxury boutiques and flagship stores remain vital for experiential purchases.
Purchase Channels: Transitioning to Digital
Digital adoption continues to grow among Chinese luxury consumers. As of Q1 2024, approximately 60% of luxury purchases were conducted online, compared to 30% in 2019. Domestic e-commerce platforms have become the preferred channels for younger and middle-tier consumers. Conversely, affluent, high-net-worth individuals still value in-store shopping for its exclusivity and personalized service.
Challenges and Opportunities for Luxury Brands
Product Availability: Ensuring a diverse and timely supply of sought-after products domestically is crucial to counter the appeal of outbound shopping.
Localized Engagement: Brands must connect with Chinese consumers on a deeper level by integrating local culture and aesthetics into their offerings.
Sustainability and Storytelling: Younger consumers increasingly value sustainability and the craftsmanship behind luxury items. Brands that emphasize these elements can foster loyalty in this segment.
Digital Innovation: Leveraging AI-driven personalization, immersive shopping experiences, and seamless integration across digital touchpoints can further enhance consumer engagement.
Conclusion
China’s luxury market in 2024 is a vibrant and evolving landscape. As older, affluent consumers drive significant growth, younger consumers’ preferences and behaviours are reshaping the market’s future trajectory. By understanding and addressing the motivations behind outbound shopping, digital engagement, and demographic shifts, luxury brands have an unparalleled opportunity to deepen their connection with Chinese consumers and secure their position in one of the world’s most influential markets.
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