Gary Leopold penned a helpful roundup of the recent L2 Think Tank conference that China Luxury Network’s Sage Brennan helped organize. He even quoted Sage repeating the China Luxury Network mantra: “China is a demographic, not a geography.”
He goes on to give a roundup of the key insights from the event with advice to luxury brands about tackling the China market.
Some of the highlights include:
- In China the luxury target tends to be much less affluent than their western counterparts, yet they devote a disproportionate chunk of their income to purchasing luxury goods. In the U.S., the average female prestige consumer registers household income of $150,000 and spends $3,000 annually on handbags. In contrast, the average female prestige consumer in China makes $18,300 (¥125) and spends $2,000 annually on handbags. Often these purchases occur after two to three months of research and consideration, most of it done online.
- From a travel perspective, too, the strength of this market shouldn’t be underestimated. In the next five years the country is expected to build 56 new airports and by 2015 they’ll be taking more than 100 million outbound trips with a spend of over $100 billon. On average, a Chinese tourist spends nearly $7,000 per trip and in 2010 they spent more on shopping during their travels than any other nation (with $21 billion spent in duty-free shops and on airlines alone!)
- Fifty-six percent of Chinese luxury purchases are made abroad, however, just over half of Chinese language sites provide a U.S. and European store/property locator — a missed opportunity to provide information to Chinese tourists.