A video on Wall Street Journal today interviews Shaun Rein, managing director of China Market Research Group, on the radical changes taking place amongst China’s luxury consumers that brands cannot afford to ignore.
Specifically, he states that Chinese consumers are now becoming more interested in spending their money on lifestyle experiences rather than shopping, both at home and when they travel. When they do go shopping, they are honing in on niche brands rather than mega-labels, he says, describing a trend which has been apparent for quite some time.
“Younger consumers, especially, are looking for more lifestyle spending,” he states. When they travel to places like Europe, in addition to making luxury purchases, “they want to go to the museums, they want to go to the beach, they want more cultural activities. It’s sort of the end of bling right now.”
Rein has several pieces of advice for businesses on how to adjust to these trends, which he believes are ongoing and long-term. “Luxury companies are going to have to really understand the Chinese consumer a lot better,” he says. According to him, luxury conglomerates must embrace a wider portfolio with different price points and niche brands instead of focusing only on the ultra-luxe end. According to Rein, a large portion of luxury sales come from the middle class. When it comes to what type of consumer has been having a major impact on China’s luxury market, he states, “It’s that girl who’s making a thousand U.S. dollars a month as a secretary who saves up money to buy that thousand-dollar Louis Vuitton bag.”
Watch the whole video below: