The Chinese luxury culture has evolved very quickly, particularly in Tier 1 cities (Beijing, Shanghai, Guangzhou, and Shenzhen), with lower tier cities also catching up. By 2012, it was the biggest luxury market in the world, and by 2015, accounted for over 25% of the global market. Partly due to high luxury taxes in China, and partly due to guaranteed authenticity, Chinese luxury consumers tend to spend more than other nationals.
But while the high-end luxury opportunity is great, it is not always straightforward. In some cases, luxury expectations in China have exceeded those of western consumers. So how should businesses respond? Nowadays, Chinese luxury consumers seek more niche experiences and local valuable products, which fit well with the new, unique image they want to present to the world. Personalization and communicating cultural significance can help luxury tourists understand the value of what they are purchasing.
Luxury shopping on a budget
While the Chinese economy has roared ahead for several years now, growth has not been even. Tourists from Tier 2 and 3 cities (places such as Nanjing, Chengdu, and Hangzhou) tend to have less purchasing power than their Tier 1 counterparts, and due to this, search for deals and discounts for luxury goods. For luxury brands, it is extremely important to realise who their customers are to be able to position brand and products correctly.
The checkout is the moment of truth
Finally, it is important to mention a key step in the customer journey - the payment.
This is a critical moment when all your marketing and advertising spend could go down the drain if your payment options don’t cater to Chinese spending habits.
Mobile payments are almost ubiquitous in mainland China - with two mobile wallets, WeChat Pay and Alipay accounting for the vast majority of transactions. International credit cards are uncommon in China. To provide the right convenience and get maximum conversion at checkout, offering mobile paymentmethods is important.