SHANGHAI: The luxury market in China is set for solid growth, but brands need to seek to influence Chinese consumers at home before they buy high-end goods abroad, a category expert has said.
Rupert Hoogewerf, chairman of the influential Hurun Report, best known for its China Rich list, said there are about 2.9m people in mainland China who qualify for the luxury consumer category.
Speaking to Luxury Daily, he said there is little sign that any other emerging country will come close, even within ten years, to surpassing Chinese affluents, who he described as the consumers "underpinning the global luxury market".
However, while that may be widely understood by the industry, the key issue is how to recognise what influences them and to understand Chinese marketing tactics.
Hoogewerf said Chinese affluents are knowledgeable and take time to explore price comparison sites, but most importantly, a lot of their research and decision-making is made in China before they travel abroad to spend.
"If you just wait by your store for people to walk in, it will probably happen, but you will be missing a big opportunity. So what everyone should be doing is looking to influence the Chinese back in China," he said.
But some brands are missing an opportunity, he continued, because they have held back from going right into China because it requires energy and resources to reach those consumers.
Those same luxury buyers are now travelling abroad in huge numbers – the total number of travellers outside of China is currently about 45m, he said, which rises to about 110m including Hong Kong and Taiwan.
"There is an impact to be had for sure," he added. "[But] you need to know how to analyse the market so you are not wasting your dollars."
Data sourced from Luxury Daily; additional content by Warc staff