Recent news on the Chinese luxury market has been negative but don’t despair, there’s still a lot of good movement.
L2 Think Tank’s The Digital IQ Index®: Luxury – China examines the digital competence in China of 95 global and five local Fashion, Watches and Jewelry brands across four dimensions of digital: Site & E-commerce, Social Media, Digital Marketing and Mobile & Tablet.
They note that the domestic chinese luxury goods market collapsed from 21% in 2012 to an estimated 2% in 2014 with 2/3 of brands missing their 2013 targets for store openings. Brands focused on Sina Weibo, YouKu and WeChat – which makes sense as WeChat captures more and more eyes and is slowly but surely expanding functionality for brands such as basic customer servicing. See LVMH official channel for an example of that luxury personal touch.
But don’t give up because…
[highlight]› 2014 will see global luxury purchases by Chinese hit 30%, they are beating the US and Russians in terms of per transaction spending too at ~USD1130.[/highlight]
[highlight]› Right now only 5% of Chinese hold a passport…and guess where they want to go?[/highlight]
[highlight]› Chinese web searches for luxury bits and bobs is up 36% year on year![/highlight]
% of chinese with passports
% of global luxury purchases by chinese
Y-O-Y % growth in chinese searches for luxury
Meanwhile we can see the mobile purchasing market in China continues to grow. The Analysis International Seasonal Survey of 2014 Q1 China Mobile Shopping Market shows mobile shopping created 78 Billion Yuan in Q1, 2014.
Not too shabby! Up 207 percent year-on-year, with a sequential growth rate being 13 percent. The overall market is experiencing a boom with Taobao and JD still grabbing the lion’s share.
