New research from Bain & Company finds changing market dynamics create new windows of opportunity for luxury labels that focus on design, fashion and exclusivity
As the global luxury market adjusts to a 'new normal' of lower, but more sustainable growth over the long-term, mainland China trails slowly behind, showing for the first time, a negative trend in 2014: negative 1 percent growth at approximately 115 billion RMB, according to Bain & Company's 2014 China Luxury Market Study.
According to the study, the region's luxury market is undergoing a fundamental shift, brought on by evolving customer dynamics, an influx of new, emerging luxury labels, and an economic slow-down. As a result, luxury brands in China must step up their game in 2015 by adapting to new market conditions and customer expectations.
Customer segments are no longer clear-cut, with common behaviors observed across demographic groups; instead, there is an increased diversity of preferred brands, and exclusivity, quality and value for money without logos are becoming increasingly important: Bain's survey of 1,400 Chinese consumers found that they are increasingly likely to switch between luxury brands. Seventy percent of respondents said they like to try different brands and styles, which has led to greater brand diversification and established greater parity between aspirational brands and established ones in terms of demand and desirability. The survey revealed that nearly 45 percent of respondents plan to buy more emerging luxury brands in the next three years.
