Despite anticipated economic growth of 8.2 percent, its slowest pace since 1999, and talk of fresh incentives to stimulate overall domestic consumption, China is still expected to become the world’s largest luxury market by 2015.
That includes luxury retail and e-commerce, says Jing Daily, a well-read digital publication on China luxury and culture.
Citing studies by Barclay’s Capital and Chinese online retail powerhouse Taobao, owned by Alibaba, Jing Daily reports that luxury e-commerce is coming on particularly strong—surpassing $2.4 billion in 2011, a 100 percent surge year-over-year, with projections for 2012 taking another huge jump to beyond $3.2 billion.
So who’s buying all this chichi stuff?
While China’s crush of new billionaires and millionaires (also known as the insanely rich) mostly buy their apparel, luggage, watches and jewelry at brick and mortar retail stores, it turns out that China’s online luxury shoppers include just about everyone else.
According to Forrester Research, aspirational Chinese shoppers come from all walks of life—26 percent of low income consumers (who earn less than $9,500 per year), 26 percent of middle income consumers (who earn up to $19,000 per year), and 33 percent of high income consumers expect luxury goods to cost less online than they do in stores.
For brands like Louis Vuitton, Gucci, Prada and Chanel, the Taobao report finds Chinese consumers can expect “discounts” of around 20 percent compared to brick-and-mortar stores within China, while shoppers can occasionally find mass-market brands, such as Coach and Calvin Klein, 50 percent cheaper online, said Jing Daily.
Perhaps not surprisingly, mistresses may also be responsible for a big chunk of luxury purchases.
“In a 2008 survey, mistresses were estimated to account for one-third of luxury product consumption,” said Mary Bergstrom, an expert on what makes China’s younger generations tick.
“Although companies do not market to this segment overtly, it carries weight and association,” she said. “Online, netizens refer to Mini Coopers and BMW 3 series cars as ‘mistress cars.’”
McKinsey notes that China will account for about 20 percent, or $27 billion, of global luxury sales in 2015.