Chinese consumers are more willing to purchase luxury goods online, the sixth edition of the 2015 China Luxury Forecast released by Ruder Finn and the IPSOS Group showed.
The report noted that shoppers in both mainland China (57%) and Hong Kong (54%) reported greater confidence in purchasing luxury online over the past year. However, both groups still raised concerns over service, trust, and overall professionalism of the website when asked about the credibility of online stores.
The majority of Chinese shoppers (81% in Hong Kong and 78% in mainland China) said they still preferred to visit physical stores before deciding to purchase to seek further product information and check product attributes.
“E-commerce is both the next big opportunity and challenge for luxury brands. To fully tap the potential of the luxury online market, brands need to consider two options: either creating their own platforms or riding on existing ones,” said Gao Ming, senior vice president and general manager of Ruder Finn Shanghai.
Despite the slowdown observed by many luxury brands in the China market, the report concluded that overall market dynamics are unchanged and consumer confidence remains high. The key driver for this continued growth and confidence in the luxury market is spending by Chinese travelers.
With the growth of outbound travel, the report predicts that Chinese consumers will continue to drive growth in overseas luxury markets. Duty free shopping is becoming a leading distribution channel for luxury goods, with 53% of mainland consumers shopping at duty free stores in the past year.
The report added that the vast majority of consumers are dissatisfied with luxury retail services in mainland China. Only 19% of Mainland China consumers and 10% Hong Kong consumers said they were very “satisfied” with luxury retail services at home.
Consequently, when shopping overseas, these consumers expect high service standards and understanding of their needs, as well as a broader product selection.
The report likewise noted that a large majority of mainland consumers said they would spend more, or at least the same, on luxury in the next year. Around 18-38% of Hong Kong consumers planned to spend more on luxury in the next year, and 52-62% said they would spend the same.
“We predict that the market momentum will remain relatively unchanged. Hong Kong luxury consumers continue to pursue innovative products and design,” said Simon Tye, executive director of Ipsos. “They seek new perspective from brands and are ready to embrace new offers that incorporate strong creative and empathetic services. There is continued strong demand for unique and customised products that retain the heritage of the brand.”