The Big Chinese Luxury Market Is Online

Emerging as a powerful player on the global stage, China’s luxury market is a captivating mix of tradition and modernity, aspiration and affluence. This dynamic market, shaped by the rising purchasing power of China’s consumers and their evolving tastes, is at the forefront of the global luxury industry’s growth.

In this in-depth exploration, we delve into the heart of the Chinese luxury market, examining the unique cultural, demographic, and digital forces that shape its landscape. We aim to unveil the motivations of the Chinese luxury consumer, the growing significance of young affluent buyers, the transformative role of digital platforms, and the emerging trends in this fascinating marketplace.

Overview of China’s Luxury Market

The landscape of luxury in Mainland China is a captivating interplay of premium products and superior services, designed to appease the refined preferences of the country’s affluent populace. This realm places great significance on prestige and reputation, often favoring globally recognized brands synonymous with unmatched quality, innovative design, and impeccable craftsmanship.

In the year 2022, Chinese luxury consumers’ appetite for luxury purchases surged to a striking $53.61 billion, claiming a hefty 25% share of the global luxury market, only surpassed by the US. Interestingly, for those invested in the cosmetic sector, personal luxury goods have been generating a lion’s share of these sales, with luxury watches and jewelry leading the pack, and contributing to almost half of all luxury sales. This trend is projected to continue in 2023 and beyond.

Upon dissecting this prospering industry, intriguing insights surface about consumer predilections and key players molding the industry’s trajectory. To comprehend the immense influence Chinese consumers exert in the global high-end market, consider this – they account for about 33% of the total luxury expenditure worldwide. Such trends and data offer valuable perspectives for stakeholders in the luxury cosmetics sector, highlighting the promising potential of this vibrant market.

In 2023 Chinese Consumers Buy Luxury Brands Online

The trend of luxury buyers is a new addiction in developing countries and consumers not only in China but also many others like India, Southeast Asia, and Brazil are becoming fans of luxury products. According to a release in Times, the number of lovers of luxury goods increased in recent times. In this regard, many luxury product manufacturing companies are now forced to implement a digital marketing plan for Chinese customers.

The primary reason behind this is to avoid various complicated laws of the Chinese government. Besides, digital marketing is considered the perfect policy for businesses to expand and break the barriers both geographically and demographically.

selling online in china: number of online shoppers

However, the second reason is that there is a noticeable increase in online shoppers in China which drove the internal luxury producers to shift their focus to digital marketing. Moreover, 70% of online shoppers use mobiles as a medium, and this could be an exceptional opportunity for marketers to increase their profits immensely.

Who are Chinese Luxury Consumers?

The Chinese luxury market is a vibrant tapestry, woven with a variety of consumer profiles and behaviors. Young affluents, notably millennials and Gen Z, drive much of the market, their global awareness and education fueling a willingness to spend on high-end products.

The market also enjoys significant patronage from high-earning urbanites in tier-1 and tier-2 cities like Beijing, Shanghai, Guangzhou, and Shenzhen, although luxury brands are making inroads into lower-tier cities as well.

The sector sees considerable interest from ‘Hai Gui’ or ‘Sea Turtles’ – Chinese individuals who’ve studied or lived abroad and developed a taste for international luxury brands.

Female consumers, particularly those within the workforce, have a growing influence on the luxury market, most notably within the cosmetics, fashion, and jewelry sectors.

What are Consumer Preferences in the Luxury Sector?

The behavior and preferences of these consumers are as diverse as their profiles. They are highly connected digitally, utilizing social media platforms, forums, and e-commerce sites for gathering information, reading reviews, and making purchases. Key Opinion Leaders (KOLs) and influencers are pivotal in this landscape, guiding consumer purchase decisions through their reviews, recommendations, and trendspotting.

Chinese luxury shoppers value quality, craftsmanship, and uniqueness, and are often willing to pay a premium for such attributes. They’re increasingly interested in the heritage and narrative behind a product, seeking a connection that extends beyond the physical product. In line with global luxury trends, Chinese consumers are shifting toward the experiential personal luxury market, seeking out brands that offer personalized and unique experiences.

The Chinese Luxury Market Differs From the West

It is very important to notice the difference between the Chinese e-commerce ecosystem and other ones. Although digital marketing is a powerful tool for brands to reach luxury customers, yet there is a long way to approach the desired goals.

The rapid changes in China’s Internet environment have prevented many operational decisions from referencing past and other regional experiences. The story of luxury e-commerce in China is also a story of the”sinicization” of European and American luxury e-commerce. However, one thing is for sure we are going to witness a new era of the luxury world’s engagement with the digital world.

How Can Foreign Brands Win the Chinese Luxury Market?

As in any other country, brand awareness is very important to get a high customer conversion rate. So for a luxury brand, especially for those who want to sell luxury products in China, it is essential to get the confidence of Chinese customers, because they don’t buy brands they don’t know.

Therefore, you need to create a very good e-reputation in all possible ways:

  1. Digital advertising & Searching engine marketing
  2. Social media management
  3. Cooperation with the most favorable e-commerce platforms in China

Digital Advertising & Searching Engine Marketing

In fact, SEM has become a very effective tool for China’s marketing strategy. When we talk about SEM, we first think about the leading SEM platform – Baidu, a Chinese equivalent to Google in essence. Baidu holds between 60 to 70% of China’s search engine market. Being the second largest search engine in China, 360 Search is also a powerful alternative to Baidu.

Baidu web page when we tape in luxury product

As the picture above shows, SEO on Baidu can help brands to get a higher rate of exposure. Since Chinese customers spend a lot of time searching for information about the products before buying, in order to make sure the one they are going to buy is the right one.

Social media management

WeChat, Weibo, and Xiaohongshu (Little Red Book) are the three biggest social media platforms in China. They are playing a very important role in Chinese modern lives and have an essential impact on fashion trends, e-commerce sales, etc. If you want to enter in Chinese luxury market, it’s impossible that you don’t have a presence on these three social platforms.

WeChat – The Biggest Social Platform

As the largest social platform in China with more than 1 billion users, WeChat is an indisputable place for luxury brands in the process of expanding the Chinese market. As of 2023, luxury brands have placed more than 500 advertisements on WeChat Moments, and Louis Vuitton, Cartier, Vacheron Constantin, Celine, and other brands have even opened their own official WeChat public accounts and mini-programs.

Weibo – Ideal for Luxury Brand Awareness

Official account in Weibo for Cartier (left) and Louis Vuitton (right)

Weibo is an open social platform, with more than 580 million users. The characteristic of Weibo is mass broadcasting. It is also an important platform for live streams, which is in the mode in China. Weibo is also a “meeting point” for KOLs in China, just like Xiaohongshu.

Xiaohongshu – The Instagram of China

So far, Xiaohongshu has an excellent platform with more than 300 million users! Xiaohongshu was only a UGC application that mainly shared cross-border products and users shares notes in the community. Therefore, the users on this platform are those who are willing and ready to buy certain products, especially fashion, and cosmetic ones. As it is trusted by users and has a giant user base, it now developed into community e-commerce, with high user stickiness.

Cooperation with the most favorable e-commerce platforms in China

The landing page of Tmall

Tmall Global, JD, and Secoo are the three biggest e-commerce platforms for luxury products.

Tmall Global has selected 505 products related to international luxury goods. Users can filter and find products based on popularity, price, sales volume, and evaluation. Taobao only accepts foreign brands that already have brand awareness in China to guarantee the quality of products on this platform.

JD, the second-largest e-commerce platform in China, is engaging in the luxury industry. cooperates closely with foreign luxury brands to ensure high quality. This platform is well-known for its excellent logistic systems. It is also developing the AR system in order to give users more facilities.

Founded in 2008, Secoo is China’s largest multi-brand luxury B2C website. The site is currently working with Tencent to create data files for more than 3 million registered shoppers.

Choose GMA to Promote Your Luxury Brand in China

Do you want to know more about China’s luxury market? Contact GMA, a digital marketing agency, specializing in the Chinese digital market.

Contact GMA
  • A team of 70 digital marketing specialists in China
  • Experienced & Professional in supporting companies in their development in China
  • With a deep knowledge of the Chinese lifestyle
  • A passionate international team

We offer cost-effective solutions tailored to your needs and budget, such as:

1 comment

  • Dear GMA Team,

    Thanks for sharing the valuable and useful information , I have followed on linkedin for some time , we like to create separated e-commerce website for main brands we represented in China for the purpose of SEO on Baidu , we are sure you may have the solution.

    Having a nice weekend and Kind regards
    wechat: oga1999

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