Empowered, wealthy women the driving force behind luxury success in China

Marina Yang is the co-founder of a high-end wedding dress store in Hangzhou, China. With an annual income of 8 million RMB (1.1 million), she allocates an average of 1 million RMB (138,000) towards luxury purchases. Her primary focus is renowned and timeless brands, such as Hermes, Chanel, and Louis Vuitton, as well as jewelry maisons like Boucheron and Buccellati. “I buy luxury goods mainly because I personally like them and for special occasions,” says Yang. “As my income has grown, it has also influenced the price range of the luxury items I purchase. For example, I may choose handbags made from rare leathers, and my jewelry selections have shifted from regular pieces to high-end collections,” she says. Luxury’s ‘she-economy’ The luxury market is in the midst of a significant shift propelled by the rising economic influence of women. Recent findings from Havas Media Network reveal that as women reach new milestones in their personal and professional lives, their desire for luxury experiences intensifies. As per the study, a considerable number of women earning an annual salary exceeding £250,000 (306,000) and possessing investable assets over £1 million (1.22 million) allocate over £50,000 (61,248) annually on luxury items. Significantly, 27 percent of women surpass the £50,000 threshold in yearly luxury spending, a figure substantially higher than the 17 percent reported for men. Personal motivations, such as viewing luxury items as symbols of success and a form of reward, play a crucial role in driving women's luxury purchases. This trend is also discernible in China. Swiss bank UBS estimates that the phenomenon of "female empowerment" could potentially contribute 3.3 trillion to 5.3 trillion to consumer spending in China by 2030. Jaehee Jung, a professor of fashion and apparel studies at the University of Delaware, believes Chinese women's spending habits will significantly influence the luxury sector. “Women are key purchasers of luxury goods, particularly in the fashion and accessories categories. Luxury brands target consumers who seek a luxurious lifestyle, regardless of the specific product category,” she says. “Given the rise in social status and purchasing power among women in China, they have become an important demographic for many luxury brands.” “Chinese women hold half the sky,” says Jonathan Siboni, founder and CEO of Paris-based data intelligence firm Luxurynsight. “Their increasing empowerment can only have a strong impact on the luxury sector, just as Japan did a generation ago when Japanese women gradually increased their empowerment.” Rise of China’s women According to the 2023 Hurun Richest Self-Made Women in the World list, China has 62 percent of the world's self-made women billionaires, totaling 68 individuals. In contrast, the US follows with 23 billionaires, and the UK ranks third with five. This remarkable proportion of Chinese billionaires is deeply rooted in the country's culture, where women have historically played a very strong role, Siboni says. “China had a woman emperor,” he adds. “And many Chinese business owners have brought women to take leadership roles in the family business, such as Pansy Ho, daughter of casino business magnate Stanley Ho, or Liu Qing, the daughter of Lenovo founder Liu Chuanzhi, who is currently the president of Didi Chuxing.” “Chinese women have confidence and are more risk-taking than their Western counterparts,” Siboni says. Industry experts also attribute the growing influence of Chinese women in luxury markets to factors such as rising incomes, changing social norms, the impact of social media influencers, increased global exposure through travel, and a strong emphasis on self-expression. Olivia Plotnick, founder of Shanghai-based social media agency Wai Social, points to China's robust gifting culture, the perception of luxury purchases as long-term investments, the brand recognition of heritage European houses, and the prestige associated with designer names. She believes the convergence of these economic, cultural and technological trends have empowered Chinese female consumers and elevated their spending power and status as a driving force shaping luxury demand in China and globally. “Due to the highly-interconnected global luxury market, the influence of wealthy Chinese women is not limited to domestic markets,” she says. “As these individuals engage in international business and travel, their impact on luxury markets worldwide may become more pronounced.” Luxury market transformation Siboni underscores two pivotal transformations in the luxury market. Firstly, luxury goods were traditionally gifted for social status, but that has now evolved into a more personal arena, with individuals today purchasing luxury items for self-indulgence. Moreover, the market has shifted from an outward display of success to an inward expression of identity. Both are driven by the empowerment of women, he argues. When it comes to choosing luxury items, wedding dress store co-founder Yang personally values the brand's story and the intrinsic power it conveys. “This is something I want to showcase in social settings or share with others,” she says. “Therefore, in my brand choices, I prefer lesser-known, high-end luxury brands. I believe that the luxury market in China is still relatively homogeneous, and many excellent traditional European brands are not well-known domestically.” Yang’s purchasing mindset prioritizes quality over quantity. Particularly in recent years, with the economic environment being less favorable, she notes consumer attitudes towards luxury goods in China have become more grounded and rational. “As a result, the frequency of my purchases has decreased. Nonetheless, I continue to selectively acquire items that hold a special place in my heart,” she says. Shifting dynamics The use of digital and social channels for information on luxury purchases is a prominent trend among Chinese consumers, especially women. While women increasingly rely on digital channels, including social media channels like WeChat, Xiaohongshu, and livestreaming platform Douyin, for information and trends when making luxury purchases, Jung notes there are generational differences when it comes to following social trends. “Gen Z would be more subjected to buying more trendy items compared to older women, who might be seeking more classic and heritage-based luxury goods,” she says.

Sectors

Insights

Company

Empowered, wealthy women the driving force behind luxury success in China