China’s luxury slowdown continues, there’s been a great deal of news about the death of “bling” as both the anti-corruption campaign and changing tastes cause consumers to turn away from logos and ostentatious styles.
This development comes at a time when department stores and small boutiques stocking smaller niche designers have been expanding across China, and Chinese consumers are increasingly using e-commerce and shopping abroad to seek out unique and hard-to-find items.
But at the same time, Gucci and Louis Vuitton logo bags and gold Hermès logo belt buckles can still be easily spotted in China—especially in lower-tier cities.
According to a new report by Carat and Jing Daily based on a survey of over 10,000 Chinese consumers, these trends are all happening simultaneously as China’s luxury market becomes increasingly diversified, and consumer tastes branch out toward a wider range of possibilities than ever before.
While one highly sophisticated, trend-setting segment of Chinese luxury consumers—defined in the report as the “Aficionados”—is focused on curating an individual style with an emphasis on design and aversion to conspicuous consumption, not all consumers have rejected ostentation. This elite group makes up only 23 percent of all Chinese luxury consumers, and will actually account for only 20 percent by 2020 as new wealth enters the market.
In contrast is the segment defined as the “Bling Kings,” or the traditionally brand-driven consumers who purchase luxury goods in order to show off their lifestyle and show less concern about quality.
The report also finds that Chinese luxury consumers don’t just fit into one of these two categories—in fact, the survey data shows there are actually five key segments that brands should be aware of. These include not only the ultra-sophisticated Aficionados and flashy Bling Kings, but also the curious “Epicureans,” wary “Skeptics,” and up-and-coming “Aspirants.” These groups make up a sizable and growing portion of the market—the Bling Kings only make up 20 percent of those surveyed, and are expected to decrease to 17 percent of all Chinese luxury consumers by 2020. Meanwhile, aspirational consumers will be the fastest-growing group, jumping from 6 percent to 19 percent in the same time period.
In addition, individual consumers won’t stay in the same category for life. Rather, as they develop more knowledge of brands and their tastes evolve, they will pass through different phases of the consumer “lifecycle,” often starting out in an “aspirational” mindset, before following the trends and passing in and out of the conspicuous consumption phase to eventually set the trends themselves. For luxury brands, the key is to make sure that a China marketing strategy doesn’t treat all potential Chinese customers as the same, but rather recognizes both the growing diversification and evolving tastes of consumers.
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