MSL China's latest whitepaper which identifies three types of female luxury consumers in China, and opportunities to engage with them.
Text of For the Love of Luxury - Communicating with Young, Chinese, Urban, Female Luxury Consumers
MSL China Executive WhitepaperFor the Love of LuxuryCommunicating with young, Chinese,urban, female luxury consumers By Charlotta Lagerdahl, Caroline Dahl and Venus Chan
About the ResearchThe findings in this whitepaper are based on 22 in-depth interviews, five of which weredone during shopping trips, with female luxury consumers aged 2032 in big cities inChina. Another ten interviews were held with experts on the Chinese luxury landscape,including managers and executives of luxury brands, executives of online lifestylecommunities, and high-end boutique owners. We also conducted detailed desktopresearch and tapped into our own experiences from previous luxury and lifestylemarketing and communications campaigns in China. The aim of the research was toenhance MSL Chinas knowledge and insight into young, female luxury consumers inChina. It was not commissioned by any third party commercial venture. We haveremoved all brand references made by the respondents. Brands are mentioned only toillustrate points made by the authors.About MSL ChinaFollowing the union with Eastwei MSL, MSL China is now a top 5 international strategiccommunications agency in Mainland China. With 200 colleagues across 4 offices, MSLChina brings together over 20 senior consultants with more than 12 years of strategiccommunications experience in this key global market. Part of MSLGROUP GreaterChina, the largest PR & social media network in the region today, MSL China providesknowledge driven, integrated campaigns and advisory services spanning nearly everyindustry and communications discipline. MSL China has received recognition from theInternational Business Awards, The Holmes Reports PR Agency of the Year, the ChinaInternational PR Association and Chinas New Media Festival for its creativity andeffectiveness in strategic communications and industry-leading social media offering.About MSLGROUPMSLGROUP is Publicis Groupes speciality communications and engagement group,advisors in all aspects of communication strategy: from consumer PR to employeecommunications, from public affairs to reputation management and from crisis com-munications to event management. With more than 3,000 people, its offices span 22countries. Adding affiliates and partners into the equation, MSLGROUPs reachincreases to 4,000 employees in 83 countries. Today the largest PR network in GreaterChina and India, the group offers strategic planning and counsel, insight-guidedthinking and big, compelling ideas followed by thorough execution.Learn more about us at:www.mslgroup.com http://blog.mslgroup.com Twitter YouTube
Women taking overChinese luxuryconsumptionIn 2010, luxury consumption in mainland China reached 7.9 billion Euro and thisdoes not include luxury cars, yachts and private jets. China is now the worlds secondlargest consumer of luxury goods after Japan, and by 2020 is forecast to surpassJapan and become the largest luxury market1.For luxury brands, women are now the key target group. In a traditionally male-dominated market, women accounted for more than 50 percent of luxury sales2 in2010. In China, young urban women born after 1980 differ greatly from their oldersisters (please see MSL China Executive Whitepaper From Collective to Individual:Marketing to the Chinese 70s, 80s and 90s Generations for more on this topic). Theybelieve in the right to a career and spend their money as they please. Having grown upin a capitalistic China with modern Western influences, they have been exposed toluxury products that define their way of life.These young, female luxury consumers are therefore a large and significant targetgroup. Despite this growing audience, many marketers know far too little about them.Most research on luxury consumers has focused on the more general segment ofChinas wealthy. But this definition is both too general and too narrow by focusingon an older target group and neglecting a large and growing segment of non-wealthyluxury consumers in China.Many women born after the 1980s are currently enjoying the fruits of their parentslabor while not yet having reached the peak of their own careers. We wanted to focuson these young, urban, female luxury consumers to learn who they are, what theirlives look like, what they dream about and how best to communicate with them. 1 World Luxury Association | 2McKinsey & Co
International fashion blogs, websites and iPhone applica-The China luxury tions such as Shopstyle.com and Style.com are constantlycommunications opportunity consulted, but more importantly, there are several influential local fashion blogs on Sina weibo (the mostThe research has clear implications for brands communi- popular Chinese equivalent of Twitter) which are consid-cations strategy. Below, we outline a few key findings. ered just as credible as famous international print titles. Our respondents highlight the importance of weibo to getBrands need to segment the market more information about luxury, brands and lifestyle. We also seecarefully an emerging new media, modeled after the US successThis report discusses an important sub-group of Chinese story Daily Candy, of highly curated lifestyle content beingluxury consumers: young females. But even this group is spread to a larger audience though daily email newslet-far from homogeneous; the women we talked to have ters, aiming to guide Chinese to a higher quality lifestyle.vastly different backgrounds, dreams, aspirations and Given the novelty of this concept in China (still a Betabudgets. Luxury brands need to understand the motiva- version in November 2011), it is too early to speak of itstions underlying the purchasing behavior of these differ- success. In any case, no matter how influential the bigent consumer segments to more effectively craft compel- fashion magazines still are, luxury marketers need toling messages for the China market. closely watch the constantly evolving Chinese media landscape, and actively connect with current and emerg- ing key opinion leaders.Communications need to start from theinside outEvery employee must be able to tell the brand story and There is a huge education opportunityto live the brand. In our work with employee engage- Our respondents lack product and brand knowledge butment we constantly meet executives who have spent big crave better information. They buy and love luxury goods,amounts of money on developing the brand and the but are the first generation of luxury consumers in Chinabusiness, but are frustrated with their own employees who and therefore know surprisingly little about both brandsdestroy the brand through both lack of brand under- and products. They are also largely in the dark about howstanding as well as engagement in their company. Internal to make the most of the luxury experience for example,communications is becoming an important communica- in applying makeup or creating a style of their own.tions discipline for managers in all industries. In the Because of this, they are surprisingly open to beingChinese luxury business, one area where the need for educated by brands about the brand itself, but alsointernal engagement becomes especially obvious is retail. about broader issues related to lifestyle. This provides aAlthough the internet is making inroads, and will become huge opportunity for communications professionals toan important sales channel as consumers become more provide advice and insights about brand and lifestyle to anknowledgeable, most of our respondents still look to the audience who are willing to listen and accept the brand ascomfort of a physical store to provide the full brand an authority.experience and safety from counterfeits. But despite theheavy investment in the Chinese shopping experience by Consumers are more traditional than theybrands, shoppers still say they are unhappy with both the seem at first glanceattitude and knowledge level of store staff. Like in other Despite her independent exterior, our young, femalemarkets, the store and its staff are key parts of the overall Chinese luxury consumer is still a traditional woman inbrand image. The store is also a unique venue for educat- many ways. She may be trying to break free of the con-ing consumers. Because of this, our findings show that straints of tradition, but under the surface, she is close tomany Chinese prefer to do their luxury shopping abroad. her family and prioritizes starting her own family life.No matter how good your external PR or advertising is, Because of this, marketers often need to complement thebranding must start from the inside out. message of the woman as the ultimate individual, worthy of self gratification with more traditional values.Endorsements should be a key component ofcommunications strategy