1、Contact us for more information via 17 Trends to Stay Ahead in Chinas Luxury Market of 2023 FOREWORD Following the relaxation of Chinas Zero-Covid policy,the Chinese luxury market experienced a remarkable surge in sales and global market share.With expectations to double its mid and high-income popu

2、lation by 2030,China stands as the most promising market for luxury goods.However,China market is constantly evolving.The ongoing digitization and technological advancements have propelled the development of digital sales channels,making omnichannel sales imperative for brands and altering the consu

3、mer journey.Top-down measures from the government are driving consumers to reevaluate and act from a new perspective,resulting in heightened consumer consciousness and unconventional consumption choices.This report outlines seven pivotal trends in Chinas luxury and fashion sector for H1 2023,coverin

4、g phenomena such as the renowned 618 shopping festival and the habits of digitally astute,individualistic Gen Z consumers.It offers practical insights for brands seeking to enhance their performance and capitalize on post-pandemic opportunities.This resource is especially valuable for those aiming t

5、o succeed within Chinas evolving market landscape.Intelligence Team,Farfetch ChinaCopyright 2023 CuriosityChina.All rights reservedJul,20232CONTENTSOVERVIEW KEY TRENDS3-Chinese 618 Shopping Day Still Sparks A Sales Frenzy-Booming Online Channels:WeChat and RED Show Tremendous Potential-The Gradual G

6、rowth Pace of International Travel Consumption -Offline Footprints are Expanding to Incremental Markets-Big-Spending Gen Zs Will Lead the Future of Luxury Consumption:Wise,Individualistic,Digitized -Shaping A Greener Future:The Rise of Sustainable Fashion-Unstoppable Pursuit of Tech-Enabled Experien

7、cesONLINE OFFLINE CONSUMERS OVERVIEWThe COVID-19 pandemic has impacted both the Chinese and international luxury markets.After the ease of Chinas Zero-Covid Policy,the Chinese luxury market achieved significant acceleration in both sales and global market share,emerging as a driving force for the ex

8、pansion of the luxury industry.OVERVIEW 52020202120222023 and ForwardShowing a presence in the global market Due to the impact of COVID-19,the global luxury market suffered a significant downturn with a 21.71%decline in its personal luxury consumption in 2020,amounting to 220 billion.1 However,Mainl

9、and Chinas luxury market demonstrated resiliency as the only region with positive growth and doubled its share of the global market in 2020.2Year of rebound Globally,2021 was the year of rebound.In 2021,the total value of the global personal luxury market reached 290 billion euros,basically back to

10、the 2019 level with an increase of 3.2%,demonstrating a V-shaped rebound.6Among this,the Chinese luxury market is less impacted compared to the global market,with its market share continuing to grow from 20%to 21%with 36%of YoY growth.7COVID restrictions and challenging macro-economic conditions The

11、 global luxury market achieved a remarkable performance in 2022 despite macroeconomic uncertainty,reaching a market value of 345 billion3,up from 281 billion in 2019.4 In contrast,Mainland China showed a relatively weaker performance due to regional lockdowns in Q2 that negatively impacted consumer

12、spending and confidence.In 2022,Mainland Chinas luxury market contracted by 10%,due to Covid-related business disruptions.5Sign of spending recovery with promising future in the Chinese market Coming into the post-COVID era,the luxury market has continued to expand in 2023 driven by strong consumer

13、demand,expecting 5 to 12 percent YoY growth in the global luxury market8 with emphasis on the Chinese market as a key growth engine.9 Going forward,the Chinese luxury market is expected to splurge again,expecting to reach$118.3 billion by 2025,accounting for more than 25 percent of the global market

14、.10For inquiries about potential cooperation and more,please contact us: 1,2,3,6 Bain-Altagamma Luxury Goods Worldwide Market Study(Fall 2022-21st Edition)4 Bain:Chinas Unstoppable 2020 Luxury Market5 Setting a New Pace for Personal Luxury Growth in China7 Bains Chinas 2021 Luxury Market8 Global lux

15、ury market to grow by up to 12%in 2023,says Bain9 NYTimes10 Will 2023 Be Another Golden Year for Luxury Retail in China?KEY TRENDSIn the process of gradual recovery from the impact of the pandemic,the 618 shopping day in 2023 recorded impressive figures.Brands like Moncler and Lemaire took part in 6

16、18 on Tmall for the first time.On the JD platform,Celine and Bvlgari witnessed a five-fold increase in sales,while Loewe and Givenchy experienced a four-fold increase.MaxMara,Valentino,and Maison Margiela saw their sales increase by more than 20 times,and brands like TODs and Ferragamo experienced a

17、 120%year-on-year growth in sales.1 Compared to previous years,this years 618 shopping day has demonstrated the following trends:7Promotions serve as a catalyst for increased sales The promotions of luxury brands may be related to sales pressure.To boost their sales,brands applied two methods during

18、 618 shopping days:rare discounts and incentives.Incentives(Interest-free installment payment):The interest-free installment option allows luxury brands to reach more customers and boost sales.Most luxury products on Tmall can be purchased with an interest-free payment in installments over 12 months

19、.Additionally,Burberrys vintage childrens backpack supports an interest-free payment in installments over 24 months.Bottega Venetas Cassette handbag,Chloes WOODY fragrance,Chopards HappySport watch,IWCs Portuguese Chronograph watch,TODS loafers,and even more items are available for 24-month interest

20、-free installments.2 3Rare discounts:From May 31st to June 3rd,Tmall Luxury Pavilion offered cumulative discounts based on purchase amounts.Customers could receive a discount of 200 yuan for orders totaling 6,000 yuan,300 yuan for orders totaling 9,000 yuan,and 500 yuan for orders totaling 12,000 yu

21、an.Burberry chose to collaborate with Alibaba 88VIP,a blend of Tmall and Taobao loyalty programs.88VIP members see an additional 5%discount when they land on the product pages of these partners.4TREND#1 Chinese 618 Shopping Day Still Sparks A Sales Frenzy1 Xinhua Finance2 https:/ Alibaba Kicks Off 6

22、.18 Shopping Festival With Discounts and Livestreams 4 21jingjiMaxMara&LONGINES 618 Shopping Day Poster on Tmall(From Tmall Official Weibo Account)MCM&LONGINES 618 Shoppong Day Posters on JD.com(From JD.com Official WeChat Account)8Launch new products adds an extra layer of excitement and allure Bra

23、nds have also chosen to launch new products during promotional festivals on Chinese e-commerce platforms.Releasing new products during e-commerce festivals can provide crucial support in terms of exposure,with the potential to reach millions of users on the platform.The level of exposure directly in

24、fluences users awareness and perception of the new product.Berluti,Moncler,Lemaire,and Rick Owens took part in the 618 shopping day on Tmall for the first time,promoting their latest collections.Prada has released its popular Re-Edition 2000 recycled nylon Hobo underarm bag and reintroduced the clas

25、sic Prada Galleria bag on Tmall.RIMOWA has released the Essential 21 suitcase in special colors,including Petal and Cedar.In addition to luggage,watch brands have also participated in the new product showcase.ZENITH introduced the globally exclusive Defy skyline watches,with 100 pieces for the Chine

26、se market.Panerai introduced the Panerai 1425 PRADA Re-Nylon mechanical watch,exclusively available on Tmall,with a global limited quantity of 500 pieces.3The power of e-commerce live-streaming Alibabas luxury shopping platform Tmall Luxury Pavilion stated over 40 luxury brand stores simultaneously

27、started live-streaming on May 31st.Among them,Montblanc by Richemont Group went live on Tmall for the first time,attracting 240,000 views and interactions.Riding on the trend of live-streaming,however,unlike traditional e-commerce,luxury brand focus on creating unique fashion angles and delivering e

28、ngaging content to keep users interested.Hence,live-stream content plays a crucial role.Milan fashion week live-streaming:Prada broadcasted its SS24 mens fashion show live on Tmall,which gave Chinese luxury consumers a front-row seat at Pradas fashion show without leaving their homes.On June 19th,Ze

29、gna held its 2024 Summer Fashion Show in Milan.This 40-minute grand show attracted 370,000 visits from people who watched it on Tmall.1Razzle-dazzle scenes:French fashion house Balenciaga live-streamed models walking the street outside of its maison in Paris to its 1.53 million fans on the Chinese s

30、ite.2TREND#1 Chinese 618 Shopping Day Still Sparks A Sales Frenzy1,2 mcchina3 https:/ 618 shopping day offers excellent marketing potential beyond discounts.Brands can leverage this opportunity by introducing new products and engaging with customers through live-streaming.Its a great chance for luxu

31、ry brands to enhance exposure and attract more traffic.CURIOSITY SPOTLIGHT:The on-and-off lockdowns in China over the past three years have pushed luxury brands to accelerate the distribution of their online channels,including social media,to offset the decline in offline sales.In 2022,international

32、 luxury brands online transactions in China reaped a high growth rate of 31%to reach RMB 220 billion.Luxury brands reached a record 40%share of online transactions in China.1 Leveraging technical innovations across multi-channels,brands have the opportunity to enhance customer experiences through pe

33、rsonalization,highlighting a seamless integration of online and offline shopping experiences.9Increasing purchases through online channelsWith the booming digital trend and further penetration into peoples daily lives during the epidemic,consumers in Mainland China have grown accustomed to online sh

34、opping,even for luxury goods.A notable increase in trust for online luxury shopping has been seen among mainland respondents.Statistics show that integrated e-commerce platforms have experienced a substantial rise of 10%-30%across different categories as reliable channels for luxury purchases compar

35、ed to the previous year.The main reasons cited by respondents for preferring online channels include saving time(46%),convenience in purchasing(44%),and easy browsing of branded products(43%).2 Additionally,95%,of high-end consumer goods consider convenience as their primary value requirement when i

36、t comes to online services.As the concentration of online luxury purchase channels is increasing,the main channels for mainland respondents to purchase luxury goods are Tmall,Taobao,and JD,each showing an increase of more than 10%compared to 2021.Meanwhile,social e-commerce platforms such as WeChat,

37、Douyin,and RED are gaining more attention from luxury consumers.3Top brands online sales channel distribution Most brands are available on ALL major online channels in China.RED and Douyin,as the emerging Social E-Commerce platform,are still new for luxury brands.BrandsOnline Flagship StoreTraditona

38、l E-Commerce PlatformesSocial Commerce PlatformsWeChat Mini-PCN WebsiteTmallJD.comRED EshopDouyin EshopLOUIS VUITTONDIORJD self-operatedCHANELGUCCIBALENCIAGABURBERRYJD self-operatedMAISON MARGIELAAMI PARISACNE STUDIOSVACHERON CONSTANTINAUDEMARS PIGUETTREND#2 Booming Online Channels:WeChat and RED Sh

39、ow Tremendous Potential1 redian news2 Forbeschina3 Sohu news10WeChat is the top choice for fashion brands As one of the major online channels,WeChat Ecosystem has become the top choice for fashion brands to implement its marketing tactics by taking advantage of the benefits that WeChat Ecosystem bri

40、ngs.The high-quality exposure environment within the WeChat ecosystem enables brands to grow their audience through the“public domain attraction+private domain sedimentation”strategy,maximizing brand exposure more frequently and in wider margins.Also,the variety of products,including WeChat Ads,WeCh

41、at Mini-P,and WeChat Video Accounts,offers an ideal environment for brands to build SCRM strategy and perform digital innovations,providing immersive online shopping experiences for customers while strengthening brand awareness.Additionally,the adoption of the DTC model on WeChat Mini-P allows brand

42、s to reach consumers directly and optimize operations for the purchase process,completing the whole buying cycle in one platform,and at the same time generating revenue as a sales channel.For example,a brand could perform media buy on WeChat Ads in various forms,launch tailored Mini-P for marketing

43、campaigns,or even build online stores for direct product purchases.Louis Vuitton Mens SS 2023 Show:Louis Vuitton leveraged the WeChat Ecosystem and implemented a multi-product matrix marketing strategy to enhance campaign exposure for its Mens SS 2023 Show at Aranya Gold Coast in China.Before the sh

44、ow,Louis Vuitton launched WeChat Ads across various touchcpoints to effectively reach and engage users,enabling the public to eagerly reserve for the shows live broadcast.During the show,the live stream on WeChat Video Accounts garnered significant attention and became a trending topic,creating buzz

45、 among the public;After the show,the replay function on WeChat Video Accounts and highlight clips sustained the campaigns momentum,reinforcing the brands image and captivating users with the fashion show content.Louis Vuitton 520 Campaign:Louis Vuitton launched ART OF GIFTING on their WeChat Mini-Pr

46、ogram for 520 Day,providing personalized product combinations for different scenarios in tailor to customer demands.Moreover,the brand synchronized the personalized services to the Mini-P,highlighting the importance of WeChat as a major online channel.With the younger generation increasingly adoptin

47、g social media as their primary source of information,brands have a prime opportunity to connect with their target audience by establishing distribution channels and implementing targeted content strategies.Among various social channels such as RED,WeChat,and Douyin,WeChat and RED have demonstrated

48、potential in online operations,offering open opportunities,aligning with preferred consumer buying behaviors,and providing reliable performance review tools.By leveraging these platforms,brands can effectively engage their desired audience and drive impactful results.TREND#2 Booming Online Channels:

49、WeChat and RED Show Tremendous Potential11Emerging opportunities on RED RED is a social commerce platform primarily used by young Chinese women interested in fashion,beauty,and lifestyle products,which provides emerging opportunities for luxury brands:Matched User Profile:RED users young and affluen

50、t profile aligns seamlessly with the segmentation needs of luxury brands,particularly in targeting the young generation,specifically Gen Z,and individuals residing in tier 2 or higher cities who exhibit above-average financial capacity.1 Furthermore,the analysis highlights that RED luxury users poss

51、ess a strong inclination to make purchases,with nearly 70%of survey respondents expressing genuine interest after encountering new luxury brands and products between one to three times.Leveraging REDs user profiles and implementing effective marketing strategies holds the potential to yield signific

52、ant conversion rates and drive substantial buying behavior.Abundant UGC/KOL resources:There are many KOLs/KOCs on RED,with 300k+content creators and 300+partnered MCN facilities,which provides an ideal environment for brand marketing.3 Effective allocation of these influencer resources could help th

53、e brand not only amplify event/product exposure but also bring direct conversion conveniently.Add-ons of the RED version of Mini-P:Following the footsteps of WeChats ecosystem,RED also introduced its own in-station Mini-P.This new feature enables brands to structure SCRM strategy,directly connect wi

54、th customers,and most importantly,seamlessly integrate the entire recommend to purchase chain in a closed marketing loop.Appealing Incentive Policy:As a community of sharing,RED offers outstanding incentive policies toward content creators as well as brands,promoting engagement for both parties on t

55、he platforms.For content creators,the platform constantly provides traffic incentives and cash incentives to motivate them in creating high-quality content while brands were offered free membership registration and traffic incentives.During the 618 shopping day in 2023,RED offered up to millions of

56、traffic incentives on brand live streaming according to their GMV/live payment amount.4TREND#2 Booming Online Channels:WeChat and RED Show Tremendous Potential1 CBNdata2 Sinanews3,4 HuxiuIt is crucial to focus on online channel distribution,particularly WeChat and RED.CURIOSITY SPOTLIGHT:For further

57、 information on building and enhancing distribution through WeChat and RED channels,please contact us: TREND#3 The Gradual Growth Pace of International Travel ConsumptionAfter the relaxation of Covid restrictions in late December 2022,international travel and holiday trips have seen a significant up

58、swing in China.This presents both new opportunities and challenges for brands aiming to re-engage with Chinese travelers while enhancing their online and offline experiences.12Outbound travel is resuming through ease of restrictions Currently,the tourists able to travel abroad for consumption are of

59、ten high-net-worth individuals who are less sensitive to airfare prices and have more privileged access to visas.Although the number of people traveling abroad for consumption has decreased,the spending amount is gradually recovering.Chinese luxury consumers started to travel internationally at the

60、beginning of 2023.A report released by tourism shopping tax refund company Global Blue in early April 2023 showed that the recovery rate of mainland Chinese tourists shopping in Europe reached 49%in March,higher than the 22%in January and February.Tourism Economics predicts that travel from China to

61、 Europe this year will recover to 50%of pre-pandemic levels,and this number is expected to reach 100%by 2025.41 Bain-Altagamma Luxury Goods Worldwide Market Study2 Bloomberg3 Fashion Network4 62%Of Chinese Luxury Shoppers Are Buying At Home Vs.In European CapitalsLuxury consumption will remain withi

62、n mainland China The pivot by Chinese shoppers to buying more domestically is expected to continue due to the pace of international flight resumptions and visa restrictions.Domestic destinations like the duty-free tropical island of Hainan continue to gain popularity,which benefits from a duty-free

63、policy for offshore purchases.Hainan Free Trade Port has emerged as a significant destination for luxury consumption in the Chinese market,accounting for approximately 13%of the domestic luxury market share.1Given that a substantial part of luxury consumption takes place within mainland China,raisin

64、g the brands visibility in this market continues to be the primary priority.CURIOSITY SPOTLIGHT:Chinese luxury consumers have seen a partial recovery in consumption outside mainland China,but it has not yet returned to the level seen in 2019.According to sales compiled by alternative data provider S

65、andalwood Advisors,62 percent17 of luxury spending by Chinese consumers in April took place within the country,far surpassing the 41 percent recorded in the same period in 2019.The impact of tourism on luxury consumption is limited although luxury consumers started to travel abroad in the first quar

66、ter of 2023.Johann Rupert,Richemonts chairman,reckons that since Chinese consumers have amassed huge sums of money in the past three years,their first expenditure after full liberalization will be to travel.To cater to this demand,Richemont has opened 14 independent brand stores in Hainan to meet th

67、e needs of this growing market.2 3To capture the potential of international travelers,its essential for brands to create a holistic traveler solution that can flexibly tailor services to meet their needs,thereby fostering continuous growth.CURIOSITY SPOTLIGHT:For further information on 360-degree in

68、tegrated traveler solutions,please contact us: Expansion to incremental markets To counter the saturation of mega-city markets,luxury brands are broadening their reach to lower-tier cities and tourist hotspots.Theyre targeting these emerging consumer segments in previously unexplored regions,aiming

69、to seize fresh growth opportunities and maintain their market footprint.Lower-tier CitiesLower-tier cities in China,characterized by a lower cost of living and higher disposable incomes,exhibit substantial enthusiasm for luxury goods.4 These regions are currently developing their awareness and appre

70、ciation of luxury,offering immense growth potential for the industry.Luxury brands recognize this value:over the past year,the LVMH Group opened 70%of its new stores in these areas,with the LV Guiyang store setting a record for opening day sales.5 Brands including Herms,Chanel,and Van Cleef&Arpels a

71、re steadily expanding their footprint in central Chinese cities like Zhengzhou.6Travel Destinations As international travel continues to recover from the pandemic fallout,domestic travel has risen as a preferred choice for consumers.The domestic travel consumer market is substantial,and according to

72、 forecast data from the China Tourism Research Institute,there will be a significant increase of 80%in the number of domestic tourists and a 95%surge in tourism revenue in 2023.7 Consequently,luxury brands have recognized the competitive potential within the travel clientele segment,with coastal cit

73、ies Aranya,Xiamen,Qingdao,and skiing resort Songhua Lake,Changbai Mountain.Given the varied and cyclical nature of tourist groups in these locations,luxury brands favor launching pop-up stores over permanent boutiques.TREND#4 Offline Footprints are Expanding to Incremental MarketsDespite the steady

74、rise of online platforms,luxury boutiques experiential aspect remains irreplaceable.Approximately three-quarters of consumers still prioritize offline shopping as their preferred option.1 Elite luxury brands are strategically bolstering their investments in physical retail:Louis Vuitton plans to ope

75、n stores in every provincial capital city before 2025 2 while Herms plans to open a new boutique in a new Chinese city every year.3The offline strategies of luxury brands in China underscore their focus on penetrating new markets and boosting brand perception.By expanding their footprint to lower-ti

76、er cities and sought-after travel locales,these brands are tapping into the enormous possibilities these regions offer.Additionally,they arrange various immersive events to continually fortify their prestigious brand standing.13Recently,Louis Vuitton showcased its fresh summer collection via a tempo

77、rary venue situated at Huangcuo Beach in Xiamen.In addition to this pop-up space,the brand has included a bookstore and is providing unique dining experiences for visitors enjoyment.During the New Year period,Dior opened a limited-time ski collection boutique in the winter skiing destination of Song

78、hua Lake,Jilin.Along with showcasing ski apparel,Dior also presented a stunning large-scale ice sculpture art installation and a Snow House caf.1 IBM Institute for Business Value2 Fashion Network3 Fashion Network4 KPMG5 Linkshop6,7 ctawebThe potential of the offline market remains notable,especially

79、 within lower-tier cities and tourist locations,which are emerging as promising growth sectors.CURIOSITY SPOTLIGHT:Louis Vuittons Pop-up Store at Xiamen(From Louis Vuittons Official Weibo Account)Immersive purchasing experience As luxury brands broaden their reach,they must adapt to the changing nee

80、ds of increasingly discerning and rational consumers.To distinguish themselves from competitors,these brands endeavor to create unique identities.Whether operating in mega-cities,lower-tier cities,or tourist spots,they focus not merely on sales when strategizing marketing activities but emphasize on

81、 enhancing brand image and delivering top-level services.By offering immersive experiences through themed pop-ups,art exhibitions,and other innovative methods,luxury brands aim to engage consumers as part of their marketing tactics.TREND#4 Offline Footprints are Expanding to Incremental Markets14Exh

82、ibition:Gucci held the Gucci Cosmos exhibition at the West Bund Art Center in Shanghai.The exhibition was divided into eight sections,showcasing iconic Gucci bags,shoes,and clothing over the 102 years since its establishment.The exhibition also invited 4 Chinese artists to create a series of theme-i

83、nspired paintings.Pop-up store:Prada opened Prada Tropico pop-up stores in HARBOUR CITY,featuring a blue and white striped design inspired by a distant world of fantasy.The pop-up stores were dedicated to a special selection of menswear and womenswear,as well as shoes and accessories,some of which w

84、ere exclusive to China.VIC experience:VIC,standing for Very Important Client,refers to notably significant customers.These individuals not only exhibit a consumption capacity that outpaces average consumers by ten times,but they also bring notable consistency.Luxury brands have designing unique offl

85、ine services tailored specifically for these VIC individuals.Luxury brands including Louis Vuitton,Dior,and Chanel have launched VIC member rooms on the third floor of Beijing SKP.Pradas Pop-up Store in HARBOUR CITY(From Prada Official Website)Gucci Cosmos at Shanghai(From GUCCI Official Website)In

86、Chinas luxury market,immersive offline purchase experiences,pop-ups,exhibitions,and exclusive VIP boutiques are pivotal in drawing in and pleasing consumers.CURIOSITY SPOTLIGHT:15The average luxury client in China is 29 years old,five years younger than peers elsewhere,and yet spends$800 per week,or

87、 30%more than the rest of the world,according to luxury online retail platform Farfetch Ltd.Gen Z the 270-million-strong cohort born since 1995 is estimated to see total spending rise fourfold from 2019 to 16 trillion yuan($2.3 trillion)by 2035,China Renaissance estimates.1 Gen Z will not only becom

88、e the largest consumer group but their purchasing power for luxury goods should not be underestimated.In China,Gen Z has grown up under the one-child policy,received a good education,and enjoyed meticulous care and support from their families.They have higher disposable incomes and are generally wil

89、ling to spend,making them the wealthiest generation to enter the consumer market thus far.According to the survey by KPMG,21%of Gen Z respondents are willing to allocate more than 16%of their income to luxury goods.2 Luxury brands are racing to capture a share of Chinas lucrative market as the big-s

90、pending Gen Z cohort propels the country to the position of the worlds top buyer.A savvy consumer and also a mindful hedonist In the face of a challenging job market and high unemployment rates,consumption naturally becomes more conservative when people have lower expectations for the future.Instead

91、 of downgrading their consumption,Gen Z chooses to be more prudent in their spending,adhering to the concept of saving where possible and splurging where necessary.They are savvy consumers who seek value for money,with product quality being a key consideration.According to research by PCG,over 41%of

92、 Gen Z prefers classic styles,considering them to retain value over time.3Gen Z is also a mindful hedonist,willing to enhance their quality of life through luxury consumption within a limited budget.PCGs research shows that over 40%of Gen Z indulge in luxury purchases to reward themselves on specifi

93、c holidays,while over 20%consider buying luxury items when they have a significant income influx.4TREND#5 Big-spending Gen-Zs Will Lead the Future of Luxury Consumption:Wise,Individualistic,Digitized 1 Digitalelite2 KPMG3 Sohu news4 Sohu newsBrands that project an image of a sophisticated lifestyle

94、and bolster gifting scenarios for self-indulgence and others are likely to attract more attention from Gen-Z.Introducing entry-level products such as phone cases and perfumes can play a pivotal role in nurturing the future luxury consumption habits of Gen-Z,especially those who currently have limite

95、d purchasing power.By offering accessible luxury items,brands can engage this demographic early on and pave the way for their future growth in the luxury market.CURIOSITY SPOTLIGHT:TREND#5 Big-spending Gen-Zs Will Lead the Future of Luxury Consumption:Wise,Individualistic,Digitized 16Digital natives

96、 are shaping the future of luxury marketing Gen Z is the first generation to grow up in the digital world,and their lives are closely intertwined with digital products.As a result,they are more connected and informed than any previous generation of consumers.Gen Z relies heavily on mainstream social

97、 media,with 65%of luxury brand information coming from social media platforms.2 Therefore,digital marketing is crucial for capturing the hearts of Gen Z.As mentioned earlier,WeChat and RED are important touch points in reaching the Gen X audience.Innovative technologies are ubiquitous in every aspec

98、t of Gen Zs lives,resulting in their shorter attention span and lower receptivity to text-based content.They prefer snackable formats like images and short videos.While Gen Z consumers share some common characteristics,each individual within the Gen Z generation is complex.Brands need to enhance the

99、ir customer segmentation capabilities,especially on digital platforms to deliver targeted advertisements,better engage with target audiences,and drive sales and loyalty.1,2 KPMGEmbracing individuality and niche culture consumption Gen Z pursues individuality and values experiential consumption.Accor

100、ding to a KPMG survey,86%1 of Gen Z respondents expect brands to use technologies like artificial intelligence to curate new products based on their shopping history and preferences.The emphasis on individuality by Gen Z has also driven the development of niche cultures.Niche cultures have a strong

101、sense of community,and the more niche a culture or product is,the more enthusiasts desire recognition.These small communities allow for better interaction and encourage consumption within that particular sphere.Luxury brands are targeting this opportunity aiming to break into these circles and attra

102、ct potential consumers through collaborations and cross-border partnerships like Gucci x Chinese IP Marsper,Bvlgari x Honor of King,Fendi x Heytea,etc.Cross-border partnerships and collaborations that resonate with niche culture communities can attract attention and boost sales.Gen Z opens up opport

103、unities for distinctive niche luxury brands,underlining the importance of brand storytelling that emphasizes uniqueness.CURIOSITY SPOTLIGHT:Considering Gen Zs significant engagement with social media,brands should seize marketing opportunities on these platforms.Utilizing images and short videos is

104、an effective way to capture this demographics attention.CURIOSITY SPOTLIGHT:For further information on how to reach GenZ in China and detailed clienteling solutions,please contact us: 1 Anta Group,WWF team up to invest in green developmentContinuous policy launches and brands embracing sustainabilit

105、yIn response to the pressing issue of climate change,China has proactively implemented policies aimed at reducing greenhouse gas emissions and curbing energy usage,with the ultimate goal of achieving a Beautiful China.Notably,the fashion industry in China has witnessed three significant movements th

106、at accelerate the journey towards sustainability:In 2022,several government organizations collaborated to issue the Implementation Opinions on Accelerating the Recycling of Waste Textiles,setting a target to achieve a recycling rate of 25%for waste textiles by 2025.In 2020,China announced its commit

107、ment to carbon neutrality by 2060,demonstrating its determination to address climate change challenges.In 2019,the China National Textile and Apparel Council(CNTAC)upgraded the Carbon Management Innovation 2020 Action to the Fashion Climate Innovation 2030 Action,reinforcing efforts to build low-car

108、bon emission reduction capabilities within the fashion industry.Following these policy initiatives,numerous brands and designers have shifted their focus towards sustainable fashion.They are adopting eco-friendly raw materials in clothing production as part of their sustainable development strategie

109、s.Leading sportswear brand Anta,for example,has incorporated organic cotton and has already produced millions of eco-friendly garments made from sustainable fabrics,including fluorine-free water-repellent fabrics and organic cotton.These advancements highlight the growing commitment within the Chine

110、se fashion industry to embrace green fashion and drive positive environmental change.1TREND#6 Shaping A Greener Future:The Rise of Sustainable FashionBenefiting from robust governmental backing for sustainability initiatives and a rising environmental consciousness among consumers,particularly the y

111、ounger generation,the luxury industry in China is now poised to wholeheartedly embrace sustainable fashion.This favorable scenario offers an opportune moment for luxury brands to align with evolving consumer preferences and actively contribute to building a more environmentally friendly future.By ad

112、opting sustainable strategies,brands can meet the growing demand for eco-conscious products while making a positive impact on the industry as a whole.181 Roland Berger x WWD2 Xinhua newsTREND#6 Shaping A Greener Future:The Rise of Sustainable FashionThe second-hand market represents a notable opport

113、unity for growth and interaction with consumersCURIOSITY SPOTLIGHT:Consumers:increasing green awareness At the same time,Chinese consumers are becoming aware of the environmental impact of the fashion industry and the changes it is making toward sustainability.Here are some consumer conceptions show

114、n in the survey:1More than 90%of Chinese consumers are aware of sustainability topics and more than 85%of consumers believe that the fashion industry has a negative impact on environmental pollutionChinese consumers are now taking action,with nearly 80%of respondents reported checking whether eco-fr

115、iendly materials during fashion purchases and nearly 50%having purchased second-hand and organic materials in the past two yearsFemale consumers are more willing to buy sustainable goods and pay a premium for sustainable goodsWhile there is a strong need for sustainable development,consumers are con

116、cerned that brand sustainability is only idea marketing and not really solving social/environmental problems.To avoid greenwashing,brands need to demonstrate substantial and trustworthy efforts toward making meaningful changes,all while adhering to emerging regulatory standards.Brands can consider t

117、he following actions to promote sustainability and avoid greenwashing:Invest in research and data intelligence to gather robust and verified evidence.Build bridges between sustainability,marketing,and legal teams for well-informed communications.Be precise and avoid broad,vague terms like green or e

118、co-friendly.and provide important caveats,context,and concrete factual informationThe boom of the second-hand market The second-hand market in China is gaining popularity as it promotes the circulation of unused items,reduces resource waste,and extends product life cycles.The economic downturn has s

119、hifted consumer habits towards second-hand trading,driven by the young generations acceptance of used items and their focus on green consumption.Plum(Hongbulin)is an online trading platform offering second-hand fashion products,mostly luxury goods.Plums promotion during the 618 shopping period engag

120、ed thousands of hundreds of young consumers,resulting in a remarkable 319%increase in merchant goods participation and a record-breaking 51%YoY surge in platform second-hand trading volume.Luxury was the most popular category:LV,GUCCI,and CHANEL were the top 3 selling handbag brands.2Chinese consume

121、rs are actively seeking sustainable fashion options,but also demand transparency and meaningful changes from brands to avoid greenwashing.CURIOSITY SPOTLIGHT:Taking a deep dive into the digital transformation journeys of brands,technology-enabled experiences fundamentally reshape how a brand interac

122、ts with its customers.The majority of luxury brands have entered the new realm by exploring new technologies.The integration of metaverse and Web 3.0,including but not limited to AIGC,3D interaction,Augmented Reality(AR),and NFT,empowers the fashion industry with an exclusive and personalized consum

123、er experience.19AIGC in the fashion industryThis use of generative AI has the potential to transform various aspects of the fashion industry,from design and marketing to supply chain and sales.According to McKinseys analysis,in the next three to five years,generative AI could add$150 billion,conserv

124、atively,and up to$275 billion to the apparel,fashion,and luxury sectors operating profits.The following demonstrates the function of AIGC at every stage in the fashion industry accompanied by real-world application cases:Product design:serve as a supportive tool for designers during the research and

125、 inspiration phaseApplication:Style3D Studio,an advanced software program for creating virtual samples launched by Style3D,allows users to conduct smart manufacturing through 3D modeling,realistic simulation,digital rending,and so on.Marketing:improve marketing efficiency and used as a gimmick to at

126、tract public attentionApplication:Tmall launched the Tmall Play AI campaign on 2023 618 promotion day,featuring AIGC technology to successfully capture public attention.MaxMara,Longines,Gucci Beauty,and other 17 brands all participated in the campaign.Supply Chain:reducing waste and maximizing effic

127、iency to drive the industry toward sustainabilityApplication:4 Paradigm,an AI technology provider,launched a Generative AI software named SageGPT that provides optimal solutions for package loading to maximize space utilization for one delivery.Sales and Customer Service:improve the sale operation a

128、nd customer shopping experience of e-commerceApplication:Style3D partnered with Tmall to launch a 3D fitting room campaign on 618 Day,providing consumers with immersive online shopping experiences.TREND#7 Unstoppable Pursuit of Tech-Enabled ExperiencesTmall Play AI Campaign Poster(From Tmall Officia

129、l Website)Embrace the integration of AIGC and metaverse in the fashion industry is crucial for maintaining competitiveness.CURIOSITY SPOTLIGHT:To get more information on AI development in China,application,and acknowledge the potential risks of adopting AIGC technologies,browse our website at: 20Met

130、averse Metaverse revolutionizes the fashion industry by creating immersive virtual environments where users can experience and interact with clothing,accessories,and fashion brands.It allows for 3D interactions,virtual try-on experiences,and digital collections.3D interaction:simplify the design dev

131、elopment process and widen the scope for designers to experience,mainly applied in fashion design and virtual showroomSephora launched Store of the Future in Shanghai with big-screen ads featuring 3D+AR techniques to bring consumers an immersive visual feast.Tmall stepped into the world of metaverse

132、 by introducing a“3D shopping space”on its APP main page,featuring interactive virtual outdoor experiences and 3D product showrooms complemented by AR try-on technology.Notably,Tmall partnered with RIMOWA to launch a captivating 3D exhibition campaign,enabling users to create personalized avatars an

133、d explore new suitcase collections through immersive online exhibitions.AR:provides consumers with an immersive and personal experience,mainly used for virtual try-on and fashion showsValentino has linked with Farfetch for a VTO pilot.Wannas demo app will include a curated selection of“Mens upper-we

134、ar pieces from the Valentino Urban Flows Fall 2023”.1Prada has launched its first metaverse fashion show of the FW22 collection,in partnership with Baidu and its virtual landscape of Meta-Ziwu,bringing an original fashion experience synchronized with the offline show and online metauniverse.2NFT:off

135、er exclusive digital collections to consumers and bridge online and offline worlds Leading Sportswear XTEP launches the worlds first digital collection of running shoes,the 160X-Metaverse.3TREND#7 Unstoppable Pursuit of Tech-Enabled Experiences1 Fashion Network2 Sohu news3 YuanyuzhouneicanAbout Inte

136、lligence Service Strategic Research&Consulting Help brands build their China market strategy,with tailor-made research and recommendations.1E-commerce Brands Performances AnalysisOur E-commerce reports and industry benchmarks will help brands compare performance against the competition and understan

137、d the winning strategies.2Social Listening&Competitor MonitoringHelp brands learn about customer sentiments,brand reputation and competitor activities.3Market Intelligence Our weekly and monthly newsletter cover the latest industry trends in China market and best practices of the top performing bran

138、ds.4Click to SubscribeContacts If you have ever wondered how to expand your business in China,how to engage with Millennials in China through an omni-channel approach,or needed insight through social listening and get to know more about how industry players are doing in China,get in touch with us.Co

139、ntacts us at Visit us at ,China market has become the growth engine for the worlds luxury industry.It is essential for brands and decision makers to have a clear view and insights on an always changing environment.From Brand E-commerce performances to the latest marketing best practices or customers

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