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How are consumer behaviour trends playing out across Asian luxury in 2024? New research shows that despite economic instability in some markets, the overall sentiment among luxury shoppers is positive and improving. But brands operating in Asia must be aware of shifting perceptions of value for money, service, and pricing in different countries across the continent.
Hong Kong-based Asia-wide brand distributor and operator Bluebell Group’s latest market study draws themes from a survey carried out in December and January of 1,750 consumers across Asia, ranging from 20 to 50 years old. Each met the criteria of spending at least €1,200 on premium or luxury fashion and lifestyle products in the previous six-month period.
Despite the ongoing challenges from a prolonged pandemic and economic uncertainty, the report identified an uptick in sentiment across Asia. Luxury shoppers in Mainland China are currently the most optimistic about the future, followed by Southeast Asia (93 per cent) and South Korea (87 per cent).
Ashley Micklewright, president and CEO of Bluebell — which works with luxury brands such as Gentle Monster, Acne Studios and Brunello Cucinelli — says he was pleasantly surprised by the upbeat sentiment but remains cautious. “There’s a difference between intention and what you actually do. A lot of people might not act with their feet. January’s sales figures were disappointing, but February has bounded back to our expectations.”
Spending intent is highest in Southeast Asia and China, followed by Hong Kong. However, the average amount Chinese shoppers intend to spend this year on luxury goods is down 5 per cent year-on-year to $13,700. In most markets, people plan to splurge on watches and jewellery as a top priority, followed by fashion (though fashion tops the list in Japan and South Korea).
The desire for niche brands, especially in fashion, is relatively solid, particularly in Southeast Asia (72 per cent) and Taiwan (71 per cent). More than 60 per cent of respondents in all markets covered by the report agree that lesser-known brands offering great style and quality are becoming synonymous with luxury.
Support is also growing for domestic brands in Asia, particularly in China and Southeast Asia. Examples of premium Asian brands that are riding this wave include China’s Bosideng and Icicle, as well as South Korea’s Gentle Monster. “If you are [an international] brand that has a high reliance on, or is targeting the Asian consumer, then you need to be worried. Especially in accessories — you only have to look at the success of Gentle Monster in that segment over other competitors,” Micklewright says.
Mainland China and Southeast Asia display greater openness when global luxury brands release new product segments such as athleisure or homeware. In fact, athleisure’s appeal is stable across Asia, apart from in Japan, which sees a decline from 78 per cent in 2021 to 65 per cent now.
Value appreciation
Over 70 per cent of consumers in all markets agree that luxury equates to quality; this reaches 94 per cent in Mainland China. Having said that, the reputation of a brand is still critical in determining purchases (in China, 96 per cent of consumers rate this as important). “Previously, I wouldn’t have paid much attention to any of a brand’s history or heritage, however, now I feel that a luxury brand should possess a brand story, history and heritage,” says one Chinese consumer in the report.
British leather goods brand Strathberry has 13 points of sale across Asia, including Japan, Greater China, Singapore and Malaysia. Strathberry head of marketing Laura Dover says the brand has doubled down on its craftsmanship messaging in response to shifting consumer behaviour. “We prioritise premium Spanish leathers and workmanship, ensuring ethically sourced, high-quality products that defy fast fashion trends,” she explains. The brand has embraced the rise in interest in natural materials across Asia and has expanded its range to include cashmere and silk accessories. By foregrounding “timeless designs”, it hopes “to encourage mindful consumption — buying less and investing in enduring pieces”.
Bluebell found that consumers are generally willing to accept rising prices if the brand delivers on quality and craftsmanship, though those in South Korea and Japan are less accommodating. Meanwhile, respondents in Mainland China, Hong Kong and Taiwan have a more relaxed attitude towards owning or displaying branded luxury items, whereas other countries — led by South Korea — prefer a quieter luxury.
This coincides with the percolating of conscious consumption, whereby more shoppers are viewing their purchases as investments. On average, 74 per cent of consumers across Asia express an inclination towards evaluating the resale value of their purchases before buying them; Southeast Asia leads at 85 per cent.
Generally, Asian consumers have been slower to adopt secondhand luxury shopping, with the report suggesting they are still finding their comfort levels with pre-owned items; secondhand is typically deemed more acceptable for “hardly used” or “rare” items. Overall, Southeast Asia has the highest acceptance rate at 72 per cent, while in other markets less than 60 per cent say they are open to secondhand purchases. Despite Southeast Asia’s openness, however, 38 per cent of respondents indicate limited experience with buying secondhand luxury goods.
With people increasingly cautious about spending due to concerns surrounding the economy, it’s logical to look at the practical side of luxury purchases, says Chloé Reuter, founding partner of marketing agency Gusto Collective, which works with Canada Goose and Zimmermann. “The data shows that consumers are spending less but spending more wisely. We’re seeing a big interest in China for gold as an investment, for example,” she explains.
“Some brands will be fortunate if they have evergreen products or limited editions that give the perception of offering more value for money. Just buying for the sake of it is now a little bit more challenging,” adds Micklewright. Asian consumers are becoming more sophisticated and seek longer-lasting items that retain value, he adds.
“I am buying brands that are classic and items that I see as an investment, whether it is in clothing or handbags or jewellery,” says another Chinese consumer in the report.
Good service and authentic storytelling
When it comes to service, respondents have an expectation of rewards during their shopping journeys. This is especially true in China where 97 per cent say they expect special perks from premium and luxury brands (at the other end, only 64 per cent of Japanese respondents expect this).
Typically, Asian consumers want the convenience and efficiency of online, as well as the human aspect and immersive experiences offered offline. Tom Griffiths, managing director of brand and digital customer experience agency Stink Studios China, observes that local bricks-and-mortar retailers have had to adapt to a world of online shopping and have become much more experiential. “In and around China over the past year, we’ve seen brands launch in-store art exhibitions, all manner of digital in-store activations — many with data walls around them for CRM gathering, and not a few full-blown brand exhibitions featuring historical products, art and other social [media] sharing-worthy installations,” he says.
Big brand events are on the rise. Ami is showing next month in Suzhou and Loewe opens its exhibition Crafted World in Shanghai later this month, while Gucci Cosmos and Pradasphere made huge impacts on social and traditional media. “These experiences give the brand a special opportunity to connect directly with loyal fans, offering exclusive access along with the glitz and glamour of a fashion show, the chance to play with cutting-edge tech in-store or simply provide a photo opportunity in front of a great installation. This type of authentic brand storytelling, letting consumers explore and experience without a hard-sell aspect, seems set to continue through 2024,” Griffiths continues.
“We work with our wholesale partners to host events, like inviting VIP customers to have personalisation sessions with a leather painting artist in Singapore,” says Strathberry’s Dover.
The top channel of influence for consumption across Asia, unsurprisingly, is social media: 46 per cent of respondents ranked this among their top three influences. However, stores see increases too — 30 per cent ranked “in-store and sales person” among their top influences, rising from 26 per cent in 2021.
When online shopping, consumer preferences diverge between favouring brand official websites and opting for multi-brand online platforms. Notably, Mainland China (59 per cent) and Korea (61) respondents stated they prefer brand official websites. Micklewright thinks this goes back to the quality of service. “Provided the brand is controlling the brand alignment, in-store, online, and marketplaces, there will see this shift. Marketplaces are more about price; the official websites are about engaging with the customer. Tmall and JD.com have had their day. They did an amazing job over the last 10 to 15 years, but now consumers in China are becoming more sophisticated so they’re going to the [brand’s] site for engagement and to understand the product.”
The intent for international travel has surged past 2023 levels. Mainland China leads the growth, with 78 per cent of respondents saying they plan to travel this year, up from 65 per cent last year. Only Japan is hesitant, with just half considering overseas trips. 2024’s top five international destinations are Tokyo, Paris, Singapore, Seoul and London.
Liang Chen, marketing and communications director for brand consultancy Eclair, says the Olympic games in Paris will be a pivotal moment. “Not only should the Olympics serve as a sales pickup, but the games hold symbolic value given the current global unrest. This should also help with consumer confidence,” she says.
Key takeaway: Bluebell’s report shows that premium and luxury consumers across Asia are optimistic about the future. This year’s spending intent is highest in Southeast Asia and China, with a focus on fashion as well as watches and jewellery. The resale value of products, along with their quality and the brand’s reputation, are all becoming important factors in purchasing decisions. Meanwhile, domestic brands are on the rise; global players must tailor experiences and service levels to each market in order to meet rising expectations.
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