Consumers in China generally seek for multiple kinds of goods that stand out from the average one. In Fashion Trade Show, although the fascination for everything dealing with luxury is still a current issue, there’s a high possibility that it has reached the “breakpoint” mode: expensive and apparently outstanding luxury goods are not coveted as ardently as we are used to seeing. Showing off is not an interesting option anymore, as long as society and technologies’ fast pace are ongoing for decades.
PREMIUM BRANDS ARE COOL NOT LUXURY OLD FASHION BRANDS
Valuable high-end products are still meaningful for Chinese consumers, they seem to be more wise and thoughtful around the significance of buying “smart” while targeting fashionable items, not necessarily out of reach, to showcase their specificities and uniqueness to others and their roundabouts.
DIGITAL IN CHINA IS FASHIONABLE & COOL
Differentiation has always been the most desired aspect that people hold dear, that’s why being “fashionable”, “cool”, “outstanding” is not only mere behaviors but also the credo of modernity. Quality over high-pricing is a newly adopted mindset for these Mainland consumers, the user-experience and reputation of the branding, goods that can shape their personality and individuality are more appreciated.
The proof results in data and numbers: a slight slowdown has been perceived in China’s market revolving around the whole luxury market in 2015, a drop of 2% with an amount estimated between 110-115B RMB. Fashion men’s wear, watches of all kind and leather goods are what mostly the main strengths of the Mainland China luxury, which growth strategy needs to be redefined through a more tailored and localized marketing impact, knowing that Branding is not that crucial. Luxury watches like Rolex is still quite purchased by many consumers, not at an incredibly fast pace though, more willing to trade down for less and buying more, high-end quality expectations included.
WHY THIS SLIGHT SHIFT?
Multiple reasons behind these consumers’ behaviors change: the predominance of E-commerce. The numbers of Chinese consumers adopting the online purchasing system keep increasing overnight, directly responsible for “launching” a specific segment and greatly handled by Alibaba which aims are dual: make it more knowledgeable and responsive services and guidance in their buying habits. They may consecrate more time before making decisions on high-end products, accessibility has been emphasized : a wide range of products are detailed and features are better explained than before. A wise consumers’ oriented mindset comparing to the ones rushing to be part of the first to buy the most fashionable good that just coming out, stressed by exaggerated advertisement. Another key point may be the Digital advancement, almost everything is at the reach of your hand with the use of smartphones, websites design are not properly optimized : developing the Chinese language is not an option anymore, especially when smartphones are used by a high majority. Items considered too expensive are not the priority.
THE CORRUPTION FIGHT LIMITS THE IMPACT OF LUXURY EXPENSIVE TREND NOWADAY
Current political situation has reduced the possibility of unfair trade related to pricing. The same goes for corruption when unimaginably expensive gifts and goods like premium fashionable watches in limited edition, are becoming step by step less alluring to these consumers. Taking up an another way of purchasing by making the right decisions are good news, even if the items seem to be lower, price speaking. Some mainland consumers took the initiative to buy recognized and standard products overseas, or during their travels to optimize their overall cost. Destinations most preferred by Chinese people are Europe, South Korea and Australia thanks to favorable exchange rates and competitive pricing on specific goods in the luxury market, a study stated by Bain&co.
DIGITAL MARKETING PRESENCE IN CHINA
Through the change in Chinese consumers’ habits, more opportunities can emerge from the small businesses that also delivers high-end quality items at an affordable price. Beforehand, the similarity was what motivating people to buy but now they are more and more seeking typical and exclusive goods that can reinforce their convictions and personality. The area of “start-up reign” means disruption can happen anywhere, at any time and small brands are well positioned to adapt their strategy to customers evolving needs. Several processes of consumptions are constantly changing, so that the way firms tend to more adaptability could influence the psychological aspect of purchasing a product, emphasizing mainly on the results and the degree of usefulness.
Few paths that marketers could undertake :
Ever-changing tastes and interest of Chinese people
Adaptability to local people in negotiations and exchange
The word-of-mouth spread in marketing that can reach as many people as possible and in China it can be viral through 2 big social media : Wechat and Weibo
An automatic sound digital marketing feature by integrating a Chinese- language web
Optimization of the site for mobile devices in Wechat and localization to the local market is significant
For brands related to luxury, an emphasis on the “young” or “millennial” (people aged between 19 and 36) criteria to attract the next generation, highly connected people
Product Owner oriented in design and store footprint
Thus, both challenges and opportunities are constantly growing at a fast pace in a macro environment. Making an impact in the luxury market has become more tough but not impossible to handle, few steps to follow for a convenient business : digital content management platform need to be tailored, create a relation of trust with customers by engaging them naturally, emphasizing on the added value generated by exclusivity and brand awareness (assessed through feedbacks and a higher return) and a measurable pricing.
Source: Marketing to CHINA