Domestic Consumption Played A Key Role In The Rebound Of The Luxury Goods Market.

Last July,

The group will pay 6 billion 500 million euros for the Dior fashion department.

Luxury goods in China in the past 5 years

Basically flat, but recorded an astonishing rebound growth in 2017.

According to the world clothing shoes and hats net, China in 2017

Sales reached RMB 142 billion yuan, or about $22 billion 70 million, up 20% from 2016, the biggest increase since 2011, and surpassing the growth of outbound tourism shopping.

Bern Shanghai partner Bruno Lannes said that the reduction of China's market price by the major luxury brands, and the government's encouragement to spend at home, played a key role in the rebound of the luxury market.

According to the report, sales of cosmetics, perfume and personal care products increased by 28% in China in 2017.

Second, jewelry sales increased by 27% over the same period last year.

Women's clothing sales increased by 24% over the past year, driven by street casual wear.

Men's sales increased by 8%.

Globally, China's share of global luxury goods market has risen from 30% in 2016 to 32% now. It is the only market share growth area.

The report also pointed out that this growth also benefited from the strong growth of China's residential property, the rise in domestic stock market and the narrowing of domestic and foreign luxury goods.

In addition, Europe maintains a 18% share, 22% in the US, 10% in Japan, 11% in other Asian countries, and 7% in the rest of the world.

Young consumers from all over the world are becoming more and more important for brands, but no one is more able to embody this trend than China.

Bain quoted an anonymous luxury brand executive as saying: "five years ago, China's luxury consumers were 10 years younger than other countries. Now this group is nearly 20 years younger than other countries."

Bain surveyed 1170 consumers, 17% of whom said they bought the first luxury goods between 15 and 19, while 48.1% of them purchased luxury goods for the first time between 20 and 35.

On average, the millennial generation bought more, and in 2017, there were 8 luxury purchases, compared with 5 in other age groups.

The analysis points out that this may provide huge opportunities for those brands aiming at the world's largest luxury market, but who will benefit will depend on how to attract Chinese young people who like to buy luxury goods.

Bruno Lannes, partner of Bain's Greater China office, said many luxury brands realized that Chinese consumers are more and more fond of luxury goods. China's luxury marketing is leading the way through opinion leaders KOL and the media.

China is ahead of all other markets in terms of digital marketing and digital consumer interaction.

But overall, the luxury consumption rate of online consumption is still very low, accounting for only 9% of the total luxury consumption, and cosmetics accounted for 15% to 20%.

The report also pointed out that although Jingdong and Alibaba have been trying to lay out the online luxury platform, consumers seem to prefer the direct brand experience.

In the survey, 70% said they would be on the official website of the brand, 42% of them chose WeChat, and another 30% said they would buy luxury goods on vip.com and other platforms. Only 21% of the buyers chose Jingdong Toplife and Tmall's Luxury Pavilion.

Bain believes that the brand should set aside 40% to 50% of the total marketing budget in the development of digital channels, while the budget to WeChat marketing platform is expected to grow 30% to 50%.

The millennial generation is the key group to redefine the development direction of the luxury market in the next ten years.

This year, the leading luxury industry is the luxury brand Gucci, which is the conquest of young people.

According to fashion headline data, Gucci sales increased 49.4% to 1 billion 550 million euros in the third quarter of last year.

In the first half of last year, sales growth also reached 43.4% to 2 billion 832 million euros. There is no suspense that it will enter the 5 billion euro club for the first time.

Driven by the rapid growth of Gucci's performance, Kai Yun group's market capitalization has exceeded 50 billion euros for the first time, a record high.

The luxury industry continued to pick up and the Dior fashion department acquired outstanding performance. LVMH group also gained two digit growth in the three quarter last year.

In the 2017 fiscal year, group sales increased by 14% to 30 billion 100 million euros in the first nine months, while sales in the third quarter increased 13.6% to 10 billion 380 million euros, higher than analysts' expectations.

During the period, sales of fashion leather goods department of the group rose 13% to 3 billion 940 million euros compared with the same period last year, while sales in the first nine months rose 21% to 10 billion 838 million euros.

In terms of share price performance, the market value of LVMH also rose from a Hermes, which was close to 130 billion euros in December last year, and its stock price increased by nearly 40%.

Bruno Lannes predicts that China's domestic market will continue to maintain a strong momentum. The strong complementary effects of the millennial generation online and online promote this growth. However, in view of the rapid growth in 2017, this year's growth may slow down to below 15%.

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