Decoding China 2023
The global luxury landscape is undergoing a transformative shift, influenced predominantly by the rise of Millennials and Gen Z. As per Bain & Co’s study, these two demographics will dominate 70% of luxury expenditures by 2025. Their values emphasize inclusivity, technology, sustainability, and circularity, thus redefining the traditional luxury tenets of prestige and legacy. Brands need to recognize and adapt to this changing landscape to stay relevant.
China, once a savior for the luxury market after the 2008 financial crisis, remains crucial for the industry’s growth. Whereas the pre-Covid decade saw China’s luxury consumption driven by economic prowess and an inclination towards foreign luxury brands, the post-Covid era has ushered in a more intricate scenario. The luxury market in China now comprises tech-savvy, discerning young consumers with a unique digital ecosystem backing their shopping habits.
Given the increasing sophistication of the Chinese customer, and especially the importance of Gen Z, how will brands position themselves to capture this massive opportunity in China adequately? Furthermore, given the complexity of China’s digital ecosystem, how can brands position themselves for future success? How will luxury spending balance out between domestic and international destinations, and how can brands achieve the right strategic mix of investments to capture both? Finally, how can brands counter the rising threat of competition from domestic premium and luxury brands?
We’ve got the answers.