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South Korea and Hong Kong may have their fair share of young fashionistas, but no one in Asia tops China’s millennials when it comes to demand for buying luxury.
A new report by MasterCard on the luxury shopping habits of Asia’s millennials finds that mainland Chinese millennials plan to spend an average US$4,362 on luxury goods over the next year, a number that’s almost double second-place South Korea (US$2,638) and the Asian average (US$2,584). They also dominate third-place Hong Kong, which had an average of (US$2,584).
Defined as those aged 18-29 (with no income statistics listed), the Chinese millennials surveyed follow many of the shopping trends that define China’s luxury market as a whole, such as a preference for foreign brands and buying abroad. Chinese millennials are the region’s most enthusiastic about Western brands, with 66 percent saying they would pick a Western luxury brand over an Asian one. Thanks to China’s high tariffs on imports, Chinese millennials are the most likely group to buy luxury abroad, with 51 percent listing this as a preference. Many in this group make quick purchase decisions—51 percent said they spend less than one month to research the goods they buy.
For Asia’s millennials, tech gadgets are luxury status symbols, and 25 percent said they plan on buying a smartphone or tablet in the coming year—making tech the most popular shopping category. This was followed by the designer clothes and leather goods and jewelry categories, which each came in at 17 percent.
One of the main takeaways from the report appears to be that luxury brands need to take country-specific approaches to reaching their millennial customers in Asia, since there are some big regional differences. For example, millennials in Indonesia and India were far more likely than those in China to prefer Asian brands to Western ones, while the rate of shopping for luxury abroad is much lower among millennials in countries without the high tariffs that China sees.