Skip to content
  • Services
  • Cases
  • Blog
  • market news
  • About us
  • Contact us
Menu
  • Services
  • Cases
  • Blog
  • market news
  • About us
  • Contact us
free consult

Changes to watch out for in China’s affordable luxury market

February 21, 2020

Accessible luxury (also called ‘affordable luxury’) refers to goods priced between mass fashion and ready-to-wear. Think Michael Kors, Kate Spade and Coach – brands that combine original design, excellent quality and distinct angles on heritage, with a price tag that allows the item to be a wardrobe addition every season. 

There’s no question these the Affordable luxury market in China has proven a hit with Chinese consumers. Tapestry, the holding company of Kate Spade and Coach, has said China is the company’s number one priority. If you’re playing in this space, with fashion or jewellery items that sit between RMB 1000 and 5000, you’d be wise to pay attention to these trends.

Affordable luxury market in China - Changing consumption china

Effect of Video Commerce on Affordable luxury market in China

We’ve previously emphasized live streaming’s boom. Last year, Alibaba’s Taobao Marketplace generated more than RMB 100 billion (USD$15.1 billion) in gross merchandise volume (GMV) through livestreaming sessions, an increase of almost 400% year-on-year. Now, livestream accounts for 9% of e-commerce sales.

Brands are paying attention to this channel shift. Relevantly for accessible luxury, livestream is getting more upmarket. Clothes and cosmetics with higher price points are making their way onto livestream, with higher conversion rates than traditional e-commerce (see figure below).

Shifting commerce mix - Affordable luxury market in China

For accessible luxury brands, getting proficient at three livestream formats is important: ‘See Now Buy Now’ (fashion shows with e-commerce integration), launching products via exclusive livestreams, and 1:1 video concierge with knowledgeable product assistants.   

Shifting commerce mix - Affordable Luxury Market China

More Impulse Purchases

Across the hard luxury and accessible luxury market in China, there’s more impulse purchases (see Figure below). Our own studies, as well as data from Bain & Company, suggest that the percentage of consumers who make luxury purchases inside 24 hours has doubled.

Increasing impulse buys - Accessible luxury market in China

There are a few key implications from this trend.

First, store managers need more merchandising assets and authority to change up in-store merchandising on a regular basis. This makes physical stores feel fresh, drawing in brand loyalists, curious luxury aficionados and window-shoppers alike. 

Second, digital brand assets and presentation need to be re-examined. Over time, brands visual appearance on WeChat and Weibo trends toward a “templated” look and feel. Ask AgencyChina for a review of your social presence in China to make the first step towards freshening things up.

POP UPS

Pop-up retail is hardly new, but last year saw a broader range of brand expressions – from cafes, to retro gaming centers, all the way to parties on luxurious boats (see figure below). All of these are ways to try and create and reinforce associations between the brand and its products.

pop-ups - Affordable Luxury Market China

Beyond the headlines and Instagrammable event photos, pop-ups also drive business outcomes. This is particularly the case in cities and geographies which are underserviced by brand stores. For instance, pop-up retail formats are where 15% of Tier 2 consumers made their last luxury purchase offline (see Figure below).

pop-ups impacting under served markets China

In summation, there’s a strong business incentive to keep affordable luxury as fresh and novel as possible. Clever deployments of livestreaming, upgrading digital marketing assets and sharpening pop-up retail strategies should all be part of this when operating in the accessible luxury market in China. 

Share on linkedin
LinkedIn
Share on facebook
Facebook
Share on twitter
Twitter

Tags

Advertising Campaigns COVID-19 Cross-border e-commerce Digital Marketing Channels Douyin E-commerce Female Consumer KOLs Little Red Book Livestreaming Luxury Marketing Middle Class Mini Programs Mobile New Retail Niche platforms Nutrition O2O Opportunities Research Retail Social Media Strategy Tmall Travel Trends Video WeChat Weibo

Archives

Other posts

Nutritional changes mean China is getting taller

Changes To China's Nutrition Present New Opportunities & Challenges

Read More
Best China Market Articles in 2020

AgencyChina’s Best Articles on China Market Trends in 2020

Read More

New Opportunities In China Imported Food Market

Read More

Chinese Budget E-Commerce Platforms

Read More

Other posts

Nutritional changes mean China is getting taller

Changes To China's Nutrition Present New Opportunities & Challenges

Read More
Best China Market Articles in 2020

AgencyChina’s Best Articles on China Market Trends in 2020

Read More

New Opportunities In China Imported Food Market

Read More

Did you get excited?

Would you like to get in touch and talk directly to someone from our team to see how we can help you?

REQUEST A Consult

About us

  • Our Services
  • Our Thoughts
  • Our Clients
  • Our Story

About China

  • Digital Marketing Channels
  • Market Updates
  • Blog

Contact us

  • [E] info@agencychina.com
  • [T] +31 (0)85 0043 668

Market Updates

Linkedin-in
Weixin
Weibo
Twitter
Youtube

Privacy Policy

Disclaimer

Jobs

Contact us

This website uses cookies to improve your experience. We only use this information for general analytics.
To find out more about the cookies we use, see our Privacy Policy.

© 2017-2020 All Rights Reserved