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As brands across the world work to understand the demands of the younger generation, the latest study to be released on millennial luxury consumers finds that China’s under-35 set has key characteristics that make it unique globally.
A UBS survey that questioned 2,109 luxury consumers in the United States and China found that for Chinese millennials, Burberry and Saint Laurent were favored at a much higher rate than among the older Chinese generation. Meanwhile, U.S. millennials preferred Burberry and Chanel, while Chanel, Gucci, and Prada were listed as “weak” among the younger Chinese generation. Louis Vuitton, however, had the best staying power overall, managing to please young and old shoppers from both the United States and China.
In addition to brand preferences, there are several other key differences between Chinese and U.S. millennials. According to the survey, Chinese millennial consumers are much less “brand-loyal” than the older generation, while U.S. millennials still remain loyal to luxury brands and show less skepticism toward them. It also notes that Chinese millennials are willing to purchase through the daigou market, which could have a significantly different impact on brand perception—and not in a good way (UBS calls the daigou market a “risk to brand equity”).
Members of China’s younger generation are also much more willing to spend big than their comparatively conservative parents, as the survey found that those under the age of 35 spent 10 to 20 percent more on luxury goods last year. This is due in large part to a sense of optimism about the future, as 60 percent of consumers in this age group believe their personal finances will improve, while only 33 percent of the older generation believes the same. This trend was also reflected in a different survey recently released by Boston Consulting Group, which found that those age 35 or younger are likely to see a 14 percent overall rise in spending through 2020.