Where the Chinese Cultural Consumer Lives and Shops

The following is an excerpt from our new report, Chinese Cultural Consumers: The Future of Luxury , which includes 88 pages of research, exclusive interviews, and insights. The spending playground of the Chinese Cultural Consumer (CCC) is simultaneously local and global, online and offline, niche and mainstream, encompassing a multifaceted field of aspiration-led subcultures. There is a sense of deliberate, knowledgeable consumption reflected in where this consumer spends, particularly given China’s prime position on today’s global map and a rising sense of self-confidence. Prior to the imposition of coronavirus-related travel restrictions in early 2020, many active Chinese luxury consumers and art collectors made a significant portion of their big-ticket purchases overseas. This was due to a combination of factors: an increase in direct flights from mainland China to major world cities and general ease of international travel, the wider selection of goods at overseas luxury boutiques, the prestige of buying brands in their countries of origin, and lower prices compared to China, where import taxes are heavy. Chinese tourist-shoppers became a reliable luxury consumer demographic following the global financial crisis more than a decade ago. According to the Chinese Tourism Academy, outbound travelers spent a total of $42 billion overseas in 2009, a figure that had ballooned to $127.5 billion by 2019. However, thanks to the sharp drop in overseas tourism in 2020 and into 2021, China’s retail landscape has undergone a transformation to localization. Barred from traveling abroad since early 2020, CCCs have been forced to do the bulk of their spending much closer to home. And as China began reopening, the extent of China’s domestic luxury rebound was almost immediately apparent. In April 2020, as many parts of the rest of the world were deep into lockdowns, the Hermès flagship store in Guangzhou’s Taikoo Hui shopping center recorded sales of $2.7 million on the day it welcomed shoppers back after a two-month closure. China’s strong recovery has also triggered a surge in domestic travel and spending, further increasing interest in culture and heritage. According to Adam Knight, co-founder of the China-focused social media agency TONG, “There has been a degree of ‘revenge spending’ and people going back to older forms of consumption of both content and products. But a lot of the trends that we are seeing are not necessarily new, they were predicted to happen over the next three to five years.” The expansion of China’s first-tier cities reflects the strength of the CCCs’ power on a nationwide basis, with a total of 15 cities now considered part of the top tier. And luxury brands have been expanding further into lower-tier cities as consumers become more sophisticated thanks to digitally driven consumption, with Knight noting that consumers even further away from the biggest cities can be a solid focus for luxury, “There are trends around the small-town youth in the countryside and those consumer groups being proud of the fact they have this small-town heritage,” he said. “Consumers might spend some time living in tier-one cities as a migrant worker but then they are returning to their hometowns and forming their own consumer identities around that. There is a counterculture of the ultra-rich, flashy Han Chinese and these contrasting rural identities which will ultimately be driving consumption moving forward.” Major cities such as Beijing, Shanghai, and Shenzhen remain the cultural capitals, but there is heightened interest elsewhere in China now as well, with luxury brands opening stores all over the country. As China’s wealth has spread beyond first-tier cities, CCCs are growing up with a sense of national pride that their parents did not experience. As representatives of one of the most powerful countries in the world, they are more willing than ever to shop Chinese brands where they live. Purchase Chinese Cultural Consumers: The Future of Luxury HERE.

Where the Chinese Cultural Consumer Lives and Shops

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Published August 19, 2021

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Where the Chinese Cultural Consumer Lives and Shops