BEIJING: Affluent shoppers in China are combining a desire for status and "brand narratives" with an interest in experiences and conducting in-depth product research online, a study has suggested.
According to research from International Luxury Travel Market Asia, some 500,000 people in China boast disposable assets of $1.6m, and the country has 4,000 billionaires in its own currency.
More specifically, the report identified a new generation of Chinese consumers, "status hunters", mirroring their European and American peers by desiring strong “brand narratives” that imbue products with unique values.
"You cannot overestimate the obsession with the Hermès Birkin bag in China right now. People travel the globe looking for brands that epitomise rarity in order to demonstrate their own status," said George Morgan-Grenville, founder of Red Savannah, the bespoke travel company.
Overall, the number of outbound tourists from China also climbed by 22.4% in 2011, to 70.3m, with this audience purchasing rising amounts of luxury goods and services abroad.
"China is the key driver of global luxury. The country has an estimated 250m people defined as buyers of luxury who are following the Western trend of spending for experiences in their travel preferences," said Doris Goh, VP, sales and marketing, Alila Hotels and Resorts.
Elsewhere, the analysis revealed "frugal millionaires" from China expect brands to deliver luxury with "elements of economy".
"They can be extremely frugal," Alison Gilmore, ILTM's exhibition director, said. "They may be making a £50,000 booking but they will shop around and go to the travel agent down the road if he can offer the package for £50 less."
Companies also have to recognise the comparative youth of Chinese buyers, as 70% of Class A consumers, with an average gross salary 200% higher than the norm, are less than 50 years old, versus 50% in the US.
Similarly, Gabriela Henrichwark, group marketing director, COMO Hotels and Resorts, reported that the "explosion" of social sites like Sina Weibo, Twitter and Trip Advisor is influencing choices in China and elsewhere.
"The result is an incredible transparency for products, services and experiences. Whether they are looking for a handbag in Paris or a week in the Maldives, consumers can make an informed decision on all purchases," she said.
"It is therefore vital that all companies follow through on their brand offerings and promises."
Data sourced from International Luxury Travel Market Asia; additional content by Warc staff