Are Tech Accessories Luxury’s Next Big Opportunity?

Ah-Lun, a young woman born after 1998 in Shanghai, upgraded to a new phone less than three months ago and has already bought 35 phone cases. "For me, the phone case doesn't just protect the phone. It is more like a fashion element — different phone cases can match different outfits," she told Jing Daily. The number of consumers like Ah-Lun, who like to collect phone cases, is growing globally. But given that so much of China’s daily life is impossible without mobile tech, the sector is especially lucrative. These cases are, after all, another way to showboat status. According to data from American market research firm NPD Group, 75 percent of smartphone users are using cases; this means that of the 1.4 billion smartphone shipments made in 2021, about 1 billion shoppers are also buying cases. Even more encouraging, public data from Alibaba-owned Tmall reveals that in China, the "stickiness" of phone cases is high, with more than 10 million users buying more than 12 cases a year. Meanwhile, market research firm Counterpoint Research found that Chinese phone users have extended their replacement cycle from 18 months to 28 months, meaning that people are replacing their phones less often. Yet, they still have the need to express their personalities through different styles of phone cases. Here, Jing Daily explores the growing phone case business. From Local to Global Opportunity While many shoppers’ impressions of phone cases may recall cheap and cheerful models, Jame Technology, the parent company of technology accessories brand Defense, has become the first company in China to go public on the back of phone cases. On the first day of its IPO in 2020, Jame Technology's total market capitalization reached $1.4 billion (9.635 billion yuan). Averaging at around $29.7 (200 yuan) per piece, Defense’s anti-drop technology taps into the phone user’s pain point: anxiety over dropping, and breaking, their prized smartphones. When it comes to design, the tech-savvy company sits in stark contrast to another leading player, Casetify — a tech accessory brand founded in 2011 by Hong Kong-based Wesley Ng and Ronald Yeung. What began on Instagram as a phone case printed with shoppers’ own photos is now a global brand peddling premium and customizable accessories. Trendy designs are Casetify’s MO, and it continues to grow its arsenal of bright, patterned cases by collaborating with everything from The Met to the NBA to Peanuts. According to Ng, Casetify is profitable and sells more than three million phone cases annually. Last year, it raised a Series A funding round of tens of millions of dollars from C Ventures, the millennial and Gen Z-focused venture capital company co-founded by Adrian Cheng. Luxury brands, too, have joined in on making fashionable cases for phones and other tech add-ons. As early as 2014, Moschino creative director Jeremy Scott's McDonalds phone case entered this segment and was soon spotted in the hands of many major influencers. In 2016, Louis Vuitton launched its Eye-Trunk series of cases for iPhone 7 and 7 Plus, inspired by their popular Petite Malle handbags, followed by an exclusive case for the Huawei P30 series in 2019. A Case for Everything According to the report by market research firm Technavio, the phone case market is expected to grow by $11.74 billion (approximately 78.1 billion yuan) in value between 2020 and 2025. However, headphone cases, computer cases, and other smart product accessories are also on the rise. In 2010, Bottega Veneta made a case specifically for Apple’s iPad, featuring the brand’s signature Intreccio woven design. Headphone cases have also become a favorite among luxury brands in recent years, with Dior, Gucci and Prada all touting high-end designs. Years later, Chanel got people talking by launching two pearlized leather AirPods cases in June 2021. These were crafted from sheepskin and featuring the classic Chanel double C logo in twinkling rhinestones. But its high price of nearly $2,970 (20,000 yuan) discouraged many. Netizens jokingly said, "the headphone case is more expensive than the headphones, so what’s protecting what?" The Parisian house also launched different materials and styles of cases, such as embossed calfskin, raffia, and embroidered crochet headphone sets to name a few. Ultimately, demand for tech accessories will always go hand in hand with the devices they’re designed to embellish and protect. To today's Chinese consumers, luxury isn’t dictated by a price tag; objects that reflect their own taste and style are more important and sought after. Phone cases (and headphone cases), like clothing, have become an important way for younger shoppers in particular to express themselves. It’s only a matter of time before luxury brands and niche players invest further in the segment and allow for more personalization.

Are Tech Accessories Luxury’s Next Big Opportunity?

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Published June 15, 2022

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Are Tech Accessories Luxury’s Next Big Opportunity?