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Chinese shoppers prefer French and Italian fashion

By FashionUnited

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Fashion

A new report by KPMG on the Chinese luxury goods market has found that French, Italian and Hong Kong brands top the list of favourites with wealthy Chinese consumers. A long-held perception of luxury consumers in China is that they are

driven by status and demonstrations of wealth. This year’s report focuses on the rise of experiential luxury and how consumption is being driven by a desire for self-reward as well as status.

French products, which were the most sought after, such as cosmetics, fashion and bags were the most coveted categories at 76%, 37% and 33% respectively. Italian brands gained the top spot for footwear (43%) and Switzerland for watches (87%). Hong Kong jewellery brands were particularly sought after by Chinese consumers, with several Hong Kong-owned premium clothing brands also doing well.

The report entitled, "Luxury experiences in China" is based on a survey of 1,200 consumers in 24 tier-one and tier-two cities across China, conducted by TNS, the market research company. Respondents were between 20-45 years of age, earning a minimum of RMB 7,500 (USD 1,154) per month in tier-one cities and RMB 5,500 (USD 846) elsewhere.

Nick Debnam, Partner, KPMG China, and Asia Pacific Chairman, Consumer Markets, said: "China continues its march towards becoming the largest luxury market in the world. Year-on-year as this market becomes more crowded, it is harder for luxury brands to enter this space. We also see rising brand recognition, 57 this year up from 45 last year. Brands therefore
need to be innovative and explore new marketing avenues."

The survey also found that China's luxury buyers are basing their purchasing decisions on a wider range of factors. "Consumers increasingly choose to reward or pamper themselves as opposed to seeking higher social status via their brand purchases. Chinese consumers also continue to place a lot of importance on the heritage of luxury brands," Debnam added.

Unique to China is the large number of relatively young multi-millionaires, far younger than their western counterparts. This spells opportunities for brands using new technologies to interact with a younger consumer generation.

Digital marketing and building online sales formats are being combined with the in-store experience. The survey found that nearly 70% of respondents said they search online for information on luxury brands at least once a month, while 30% do so more than once a week. While official brand websites are often used as the first point of call for specific product information, celebrity blogs and other micro blogs also play an important role when building a brand image in China. "Luxury companies therefore need to think about how their strategies reach key online influencers," Debnam explained.

"The traditional entry route for overseas brands has been through partnerships with local franchises and distributors. In recent years, as the business landscape has become more open and transparent, many companies have now fully acquired their retail operations in China, including some that have entered the market directly with a wholly foreign-owned enterprise (WFOE) model," he added.

Image: Chinese luxury
China
KPMG