Generation Z consumers in China are spending big on luxury goods
The latest survey from OC&C Strategy Consultants confirms one of the key tenants behind our Living the Life investing theme – Chinese customers account for 25% to 35% of global luxury sales and most of it (65% to 75%) is happening outside of China. The survey also points out that online sales now represent 9% of China luxury fashion and accessories sales. While the degree of online sales is low compared to other product categories in China, the survey confirms the influence of our Digital Lifestyle investing theme is bleeding over.
Global consulting firm OC&C Strategy Consultants today has released a report entitled “Bridging the trust gap – The end of the luxury e-commerce dilemma in China”, which aims to offer luxury brands insights into Chinese consumers’ preference on luxury brand spending, in particular the online channels.
According to the survey, online luxury shoppers are growing across all generations but represent a higher share of younger age groups, with more Gen Z respondents (born after 1995) (59%) saying that they are shopping online, compared to millennials (born between 1980 and 1995) (37%) and Gen X (born between 1960 and 1980) (26%). However Gen X respondents said they are keen to shop more often online in the future.
The survey finds 50% of Chinese Gen Z luxury shoppers spent more than RMB 50,000 last year, compared to only 32% for millennials and 34% for Gen X. 66% of Gen Z respondents agreed that “price is not my main consideration, finding items I like is most important” whereas the percentage agreeing with the same statement was 48% for Gen X and millennials.
“Gen Z consumers are more inclined to spend on luxury goods than older generations for several reasons: they are often still living with their parents because they have little hope of buying their own apartment when property is so unaffordable. And because they’re not motivated to save, they have more disposable income. They also have a different work ethic and set of values to their parents – they are more open to enjoying life,” said Veronica Wang, associate partner at OC&C Strategy Consultants.
With regards to “assortment”, there are differences between the generations: Gen Z shoppers are looking for the latest in-season products as a unique statement of their personality while older customers are prefer a wider choice of stock keep units (SKUs).
