As the world’s second largest market for luxury items, China has earned its seat at the head of the table. - The Bergstrom Group

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LUXURY LOVERS in China
Why consumers are loyal to luxury
PERSPECTIVE
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2. INTRODUCTION As the world’s second largest
market for luxury items, China has earned its seat at the
head of the table. KPMG recently completed a survey
(“Refined strategies: Luxury extends its reach across
China”) to determine how the global economic downturn
has affected consumption in China. Interviewing over 900
people between the ages of 20-44 across 15 cities, KPMG
uncovered that 62% maintained spending levels on
expensive goods in 2009 and 2010.
Photos thanks to trendspotters and staff:
Jinni, Zhouwei, and Toni
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3. In fact, instead of downgrading to less expensive branded alternatives, consumers largely
stayed loyal to their preferred (yet expensive) brands.
So why the hesitancy for switching to a less costly alternative? If Chinese youth have gained
a reputation as being fickle, why are they less willing to save money for similar products?
And what categories are they less willing to experiment in?
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4. Luxury Life or Luxury
Product?
To find out, we interviewed Elsa, a 28
year-old luxury consumer from Ganjiang,
Jiangxi Province. Elsa doesn’t live with
her family and was unemployed for part
of last year but was still not interested in
switching to less expensive skin care
and cosmetics.
I don't wear high heels and I'm obviously not
an office lady. So, it's not suitable for me to
carry a Gucci or LV bag. I don't have any
luxury clothing items but I do use luxury skin
care and cosmetics products because I don't
trust small brands for these kinds of products
- Elsa, 28, female, freelancer, Ganzhou,
Jiangxi Province
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5. We could own a luxury product but we couldn’t afford a luxury life.
- Elsa, 28, female, freelancer, Ganzhou, Jiangxi Province
To see the related posts:
Why Consumers are Loyal to Luxury
Luxury Assumptions and Preferences
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6. A Qualified Luxury
Consumer
One has to have a decent economic foundation to
get the title as a qualified luxury consumer. Those
who struggle to save money for an expensive bag
are not qualified. My parents bought me those
luxury products. I assume I would truly deserve
luxury products after I am 30.
– Sophie, 22, female, Shanghai, PR
I have some friends about my age who work at
fancy office buildings. They talk about luxury
brands and ask each other how many LV and
Gucci bags they own. They wear shirts with collars
and high heels at work and they dress like that too
after work.
- Elsa, 28, female, freelancer, Ganzhou, Jiangxi
Province
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7. I would buy when I am rich enough that no
one would doubt that I am carring a
imitation. I always doubt if it's a real one
when I see 20 something girls having LVs,
but I think my boss (a mid-aged woman) is
having a real LV.
-Cynthia, 23, female, Shanghai
Well personally, I like being natural. I don't
like the idea of purchasing luxury items
only to show off. They are supposed to be
functional and please you.
-Elsa, 28, female, freelancer, Ganzhou,
Jiangxi Province
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8. Where would you buy luxury items?
Take-away: knowing that prices may be inflated in China and concerned about the
quality and freshness of goods, our respondents favored shopping outside of the
mainland but knew where they could be bought locally.
Hong Kong and the US. Luxury products in China are updated too slowly and are
expensive. I usually ask my friends to buy them for me when they go abroad.
– Sophie, 22, female, Shanghai, PR
Plaza 66 and The Peninsulas Hotel. The Peninsulas is a newly opened hotel, and
carries brands that aren’t in Plaza 66.
– Kiki, 27, female, Shanghai, boutique sales
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9. What do you buy next?
Take-away: Bags are almost old hat (Hermes, Chanel and
Balenciaga), youth are keen to test new watches, sunglasses
(Chloe and Chanel) and even furniture.
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10. I would like to buy a watch. A good watch is
important to a man.
– Jay, 24, male, Nanjing, travel agent
Furniture is like real estate – it is stable and
dependable.
–Cynthia, 23, female, Shanghai, executive
assistant
I think it would be a watch because owning a
Switzerland watch is my dream.
– Winnie, 23, female, Shanghai, HR
representative
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11. ..
ABOUT US
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12. OUR STORY
Established in 2006, The Bergstrom Group has developed a reputation for
providing vivid customer immersions for brands and agencies. We began our
commitment to China by focusing on youth and have since broadened our scope to
include women and lower tier consumers.
Based in Shanghai, our on-the-ground team of subject matter experts, researchers,
trendspotters and photographers is dedicated to telling the story of new China in a
way that is both authentic and actionable.
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13. GET CLOSER
www.thebergstromgroup.com
info@thebergstromgroup.com
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