Almost exactly a year ago, China lifted its traumatic COVID lockdown restrictions. The year that followed has been challenging and full of contradictions. A desire to resume traveling is offset by visa restrictions, safety concerns and fewer flights. The ability to shop in-person is tinged with spending caution around a slowing economy. Social events and live experiences are back, but flashy status spending feels outdated. The impact of this turmoil led many to ponder whether they want to continue living there (1 in 3 question the benefits of living in China). Some have fled to study abroad or to their family’s second homes outside of the country.
Despite all this, those who have remained are spending as much on luxury as they did during Covid (which was a lot), and some even more. The middle class may be a touch more cautious, but half tell us their personal spending hasn’t slowed at all. What HAS changed is where they are spending it. After a turbulent year, we see them expressing a shift in values through their spending.
“With all my friends around me traveling this year, it feels like everyone is trying to make up for the lost time”
Ophelia Y, 27, Shanghai
“I’m not sure if it’s the epidemic making us stuck for too long, but sometimes I feel it is better to go travelling than to buy a luxury object…I’m willing to spend more for the experience like the premium hotels and business class which I may have sacrificed in the past. But now the feeling and experience comes first!”
Ziyi W, 27, Wuxi
Travel is by far the #1 spending priority for the LuxuryVerse. After a year where travel was out of the question, a change of scene IRL is exactly what they are craving. Which begs the question, why are so many Western-based global brands feeling the pinch in travel retail? It might be because where she is traveling has shifted. Luxury hospitality within Asia is thriving. Popular destinations include: Japan, Australia, Thailand, Jeju Island and the Maldives. Visa issues as well as fear around safety and culture wars in Western luxury capitals have female luxury buyers feeling hesitant to leave Asia. As a result, domestic duty-free and travel destinations within Asia are profiting.
Yet, she still dreams of European travel. The female Chinese luxury buyer will return to Paris, London and Scandinavia and luxury brands should prepare to welcome her soon. Many women told us they are planning trips to Europe in 2024. However, when it comes to North America…not so much. The prefer the luxury shopping experience in Europe and she is sensitive to racism. There is a very real “viral spiral” that happens on Chinese social media when a story surfaces about a Chinese citizen being treated badly by a luxury brand. COVID seems to have increased this sensitivity.
“Chanel and LV are always my first choice; their bags are very classic and hold the value better.”
Michelle Y, 42, Shanghai
If she is buying a product, instead of an experience, it is a handbag. That said, it lags well behind travel. Last year a full 50% said handbags were top of their spending list, this year it is 1 in 5. Therefore, it is not a surprise that the most loved luxury brands are those that nail the handbag category. The Chinese buyer wants to feel that they have classic designs, high quality and that they will hold value. Louis Vuitton, Chanel, Hérmes, and the quiet luxury brands Bottega Veneta and Loewe are outperforming big fashion houses like Dior, Prada and YSL. Because she hasn’t yet resumed her trips to Paris, London, and New York, she is shopping locally at luxury malls in China where the service and product assortment improved vastly during Covid.
“I have the habit of doing treatments and working out every day, so I’ve cut back my spending on the make-up.”
Asuka Y, 35, Guangzhou
“In recent years, Chinese brands are getting better and better, and the prices are cheaper.. You can choose the high-end line from Chinese brands as an alternative, and the result is the same those international big names.”
Momoko H, 37, Guangzhou
She is spending on beauty and wellness but investing more in treatments, experiences and domestic brands. The “less is more” attitude seems to permeate when it comes to beauty spending. They want to invest in results-oriented treatments and only buying their absolute favorite products.
They are searching for product quality and finding it domestically. Brands on their radar include DOCUMENTS, the innovative and theatrical fragrance brand (priced on par with Byredo), Beast from the East sensitive skin care, and makeup innovator Into You (we want to get our hands on their “lip mud”). Local cultural pride, great products and a good value proposition have made it harder for foreign brands to compete.
All insights are derived from individual chat conversations, rich with visuals from their lives, with the members of our China LuxuryVerse (our 2nd round in 2023). This cultivated community is made up of 100 female luxury buyers, aged 20-42, living in Shanghai, Beijing, Guangzhou, Chengdu, Shenzhen, Suzhou, Xi’An, Hefei, Wuxi, Tianjin, Ningbo, Guiyang, and Hong Kong. Each member must meet spending criteria in luxury ready-to-wear, jewelry and beauty to qualify as part of the community. We are grateful to our “LuxuryVerse 100” in China who speak to us very openly and honestly about their attitudes about life, work, home, dreams, and their desires for luxury and beyond.