Asia and Luxury Spending

Isaac Mostovicz writes that a slowdown in the Chinese economy could have a knock-on effect on the Luxury industry...

A MasterCard survey on Consumer Purchasing Priorities has placed shoppers in Singapore, Japan and India among the Asia Pacific region’s top luxury consumers. According to the survey:

“Singapore (57%), Japan (50%) and India (46%) lead other countries in terms of ownership of luxury goods; nearly half of the consumers there own at least one luxury item worth more than US$500.”

According to the survey, Indians are more inclined to own jewellery; Singaporeans prefer luxury watches, jewellery and designer clothes and leather goods and Japanese consumers favour designer clothes and leather goods and luxury watches. MasterCard Worldwide Senior Vice President Porush Singh said:

“This survey shows that luxury shopping varies dramatically across emerging and developed markets. As with other recent surveys, it is the most buoyant and resilient economies that can afford to spend on luxury items and India and Singapore would certainly fall into that category… Luxury shoppers remain loyal to their brands, even when the economic climate isn’t favourable.”

It is perhaps worth noting that China was not one of the countries polled.

China has been a key area of growth for luxury markets in recent years, although an article published today on Wall St Cheat Sheet claims that according to a recent Bloomberg poll, 59% of global investors believe that China’s GDP will gain less than 5% annually by 2016, compared to a 9.5% gain last quarter, with the majority believing this slowdown will occur over the next two to five years.

According to Affinity China,

“China has grown its number of millionaires from 300k in 2006 to over 1 million today.  In fact, Chinese luxury consumers are on average 20 years younger than luxury consumers in the US or Japan.”

If the luxury market in China dows slow, this may have negative knock-on consequences for the luxury industry that has been trying so hard to appeal to Chinese consumers.

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The importance of design when attracting luxury consumers

Isaac Mostovicz writes that store design is crucial in attracting a luxury consumer base...

I have written previously about how important it is for luxury brands to be innovative and creative, both with their products and the way they market themselves.

Since buying luxury items is often as much about the experience as about the values of the brand, store design is crucial in attracting, and retaining, a luxury client base.

The Louis Vuitton maison that is due to open in Singapore this month will be on a custom built island, and is a prime example of the need to innovate when attracting customers.

Louis Vuitton Singapore Maison

As this recent article on Luxury Daily points out, more and more people have taken to the web for shopping, so luxury brands must up their game and focus on design to captivate consumers.

The article’s author quotes Suzan Wines, a partner at I-Beam Designs, who says:

“People instinctively associate a rewarding, enlightening or pleasant shopping experience with a brand and are compelled to return to participate in that enjoyable experience again and again.”

Customers with Theta personalities in particular are likely to enjoy shopping in a store that fits in with the values the brand associate themselves with. This is because they may be drawn to buy products that they see as helping them fit in within a desired group.

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