Green is the new gold in China’s hard luxury segment

The following is a preview of Jing Daily’s flash report “Hard Luxury: The New Chinese Consumer.” Get your copy today on our Reports page. Sustainability is no longer a niche concern for only the most environmentally conscious consumers. It is now top of mind for millions of shoppers, who demand far more transparency and green credentials from the brands they choose to buy from. This is becoming particularly critical in mainland China, a market that is not traditionally associated with environmental activism. Today, a rising number of affluent Chinese consumers prefer sustainability-minded brands and products to a greater extent than their counterparts in other countries. A key concern According to PwC’s Global Consumer Insights Pulse Survey, in June 2022, 34 percent of Chinese consumers “often” or “always” agree that the environmental actions of a particular company influence purchase behavior, compared to 29 percent in the US. Data demonstrates Chinese consumer attitudes towards high-end luxury jewelry brands. According to an Altiant survey of 100 mainland Chinese consumers in April 2022, 86 percent said they found it “essential” or “important” that any precious stones used in items like rings were ethically sourced, while just three percent said it was “not very important,” or “not at all important” to them. In April 2022, 86 percent of mainland Chinese consumers said they found it “essential” or “important” that any precious stones used in items like rings were ethically sourced. Chinese consumers have only become more sustainability-minded when making purchase decisions since the onset of the Covid-19 pandemic in early 2020, according to Altiant. Much of this can be attributed to the growing spending power of Chinese millennial and Gen Z consumers and the environmental consciousness of these increasingly influential cohorts. Young consumers powering the trend According to Credit Suisse Research Institute, Gen Z and millennial consumers in China are more environmentally conscious, more likely to buy sustainable products, and more distrustful of corporate sustainability claims than their counterparts in the United States or Europe. This trend was highlighted in the Altagamma-Bain Worldwide Luxury Market Monitor 2022, which identified sustainability as a rising factor in the luxury market and increasing demand for sustainable and ethical products. This has already led to a shift in the industry, with brands investing in sustainable practices and transparent supply chains. However, opinions differ on the extent to which environmental consciousness and interest in sustainability impact current spending decisions in China’s hard luxury market, compared to other segments, such as apparel. Increasing numbers of young consumers are opting for second-hand luxury items or certified sustainable brands to limit their carbon footprint. Timepieces vs. jewelry One open question the hard luxury market faces is how much sustainability plays into purchase decisions for timepieces compared to jewelry. A clear preference for sustainable and transparent sourcing has encouraged local and regional high-end jewelry brands to offer greener options, in some cases starting several years ago. Hong Kong-based Chow Tai Fook Jewellery, for example, introduced its “T Mark” sustainable diamond jewelry sub-brand in 2016 and publishes an annual online sustainability report. Seven years after its introduction, T Mark now accounts for nearly one-third of all Chow Tai Fook’s diamond sales. As corporate managing director Kent Wong Siu-kee noted in 2021, the jewelry giant’s sustainable segment is growing by double-digits each year, driven by demand among younger consumers in particular. As Wong told the South China Morning Post: “Whenever young consumers purchase products, they will consider whether the product provides an additional kind of value: to reduce carbon emissions and save energy.” Download your copy of "Hard Luxury: The New Chinese Consumer" on our Reports page.

Sectors

Insights

Company

Green is the new gold in China’s hard luxury segment