By Rob Starr, Content Manager, Big4.com
Chinese consumers are traveling according to KPMG’s sixth annual publication on the sector. In fact, the number of travelling Mainland Chinese consumers continues to rise and global luxury brands are subsequently adapting their business strategies, both in China and in their home markets.
One of the key findings of this year’s survey is the rising number of Mainland Chinese consumers travelling overseas. This has increased to 71 percent of survey participants in 2012, from 53 percent in 2008, a significant change. A majority of survey respondents (72 percent) said they purchase luxury items during overseas trips, with cosmetics, watches and bags winning the top spots.
Overseas luxury brands with a presence in China are benefitting from this trend, as are some of the domestic Chinese brands that have or are planning to establish overseas operations.
For purchases of cosmetics and perfume, a majority (60 percent) of respondents said Hong Kong, Taiwan and Macau were their top locations; this is a significant increase from 43 percent in 2009. Mainland China was voted their second choice, while Europe also saw a marked increase due to the rising number of travelling Chinese, up from 3 percent in 2009, to 20 percent in 2012.
Additionally, digital media plays an increasingly important role in China, as the survey found that around 70 percent of potential consumers search for luxury brands on the internet at least once a month. It also notes a surge in online shopping intentions, with 40 percent of respondents indicating they are interested in purchasing luxury goods on the internet, a substantial increase from 22 percent in 2011.
Brand recognition meanwhile continues to increase as consumers become more discerning. The survey’s respondents said they recognize 59 luxury brands, a figure that continues to rise over successive annual surveys. Meanwhile, 56 percent of respondents said they prefer to purchase well known luxury brands, while 69 percent separately indicated they would pay a premium for well known, popular luxury brands.
Chinese consumers also distinguish among countries of origin and associate certain countries with particular products. The survey highlights a continuing strong association towards European heritage brands: Switzerland came top for watches, France for cosmetics, perfumes, clothes and bags, and Germany for automotives.