Affluent Chinese will spearhead growth in the luxury market
New study finds 75% of luxury purchases will be by Chinese consumers by 2020
Affluent Chinese consumers - those between the middle-class and the rich - will be a 'powerful force' in the growth of China's consumer market and will account for some 75% of purchases of luxury products by 2020. This is the main conclusion of a study by the Boston Consulting Group (BCG). They will also come to account for 5% of global consumption over the same period.
BCG says that this category - the affluent - numbers around 120 million at present with annual purchasing power of $590bn. This will rise to 280 million by 2020 to account for 35% of the Chinese urban population and 20% of total population. Their annual buying power will have risen to some $3.1tn. Categories of luxury products poised to grow include skincare products and cosmetics.
The consultancy report stresses that the affluent adopt key attitudes and behaviours that sets them apart from both the middle class and the rich. They trade up for emotional gratification and seek status and recognition. They are also relatively sophisticated, travel abroad and adopt new brands. The report suggests that to tap this market, companies need to continually rethink how they position their brands and how they connect with these 'evolving consumers'.