China’s Luxury Recovery Is Leveling Off, Agility Study Finds – WWD

LONDON — A brand new examine round China’s outlook for 2022 from consultancy agency Agility Analysis exhibits that the nation’s street to restoration to pre-pandemic ranges seems to be leveling off, with even the nation’s prosperous and above class remaining optimistic and keen to spend.

Based mostly on interviews with 1,000 prosperous customers who’ve 400,000 renminbi, or $62,500 at present change, in family revenue, and high-net-worth customers, who’ve a minimal of $1 million in property beneath administration, the examine discovered that the restoration development, which emerged after the Wuhan lockdown in March 2020, seems to have paused, with customers’ luxurious spending expectations remaining at related ranges to the primary quarter of 2020.

This comes as China’s GDP development slowed within the third quarter of 2021 to 4.9 % year-over-year and solely 0.2 % in contrast with the earlier quarter. Development was impacted by vitality shortages, worries surrounding the property sector and bond market, and native shutdowns prompted by small COVID-19 outbreaks.

The excellent news is that the rich in China stay resilient spenders. The examine sees a diverging development between the prosperous and high-net-worth teams. The latter’s optimism is continuous to development upward from six months in the past, whereas prosperous customers’ outlook has stayed the identical. Vehicles and watches are classes the place the high-net-worth group confirmed considerably larger willingness to extend spending.

Shoppers have gotten extra rational and are in search of timeless merchandise, particularly Gen Z. Those that mentioned they like luxurious objects over new and stylish ones from this age group jumped from 26 % to 44 %, in comparison with six months in the past. Curiosity in secondhand luxurious items, renting luxurious and classic luxurious can also be rising.

The examine additionally discovered that its members confirmed a robust need for immersion in luxurious manufacturers and to be handled specifically. Each prosperous and high-net-worth customers rated model experiences as the highest issue influencing luxurious buy selections. The in-store expertise and direct model “contact” are notably crucial for big-ticket purchases or shopping for a model for the primary time.

Lastly, it confirmed that sustainability has change into a salient consider luxurious issues, particularly for the youthful era. Greater than half of Gen Z customers within the examine mentioned sustainability influences luxurious buy selections “lots” and an extra 44 % mentioned it influences them “considerably.”

The examine is part of Agility Analysis’s biannual TrendLens analysis, which covers greater than 12 key markets globally and leverages respondents internationally from its excessive web value group.


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