Hiding Wealth In Clothes, China'S Luxury Consumption Is Becoming Low Key.

Data from all sides show that the decline of China's luxury goods market since 2014 has been an indisputable fact compared to the past "unlimited scenery" development trend.

In January 20, 2015, Bain & Company, an internationally renowned management consulting firm, officially released the 2014 China Luxury Market Research Report.

In this report, Bain consultancy said that in 2014, China's luxury goods market had experienced the first negative growth, an increase of 1% compared with 2013, and was affected by macroeconomic and consumer demand. It is expected that the trend of China's luxury market in 2015 will be similar to that in 2014.

According to the annual luxury goods report released by the Research Institute of luxury goods and the Institute of wealth and quality of consultants, the consumption of Chinese luxury goods in mainland China has declined for the first time in 8 years, with a total consumption of $25 billion, down 11% compared with the same period in 2014.

This also led to a decline in the proportion of China's luxury goods market to the global luxury market from 13% in 2013 to 11% in 2014.

The decline of China's local luxury goods market has also affected the expansion of luxury goods companies in the Chinese market.

Research shows that in 2014, sales growth of major luxury goods groups in China's domestic market slowed down significantly.

The serious backlog of inventory has made the discount and disguised discounts in luxury stores become the norm, and the opening of new stores has slowed down.

Some even believe that China's local luxury market will gradually become the "chicken ribs" in the eyes of international brands.

In sharp contrast to the decline in the local luxury market, more and more Chinese consumers chose to buy luxury goods abroad in 2014, and their strong "sweep" strength is constantly causing global amazement.

Statistics show that although the local luxury goods market has experienced a serious decline, Chinese consumers are still the world's largest luxury buyers.

In 2014, Chinese consumers spent $106 billion on global luxury goods, accounting for 46% of global luxury consumption.

Compared with the 11% decline in domestic consumption, overseas consumption grew by more than 9% over the same period last year, reaching 81 billion US dollars.

That is to say, 76% of Chinese consumers' luxury consumption occurred overseas in 2014.

This obvious regional division of consumption has attracted the attention of many people in the industry.

Research shows that the reason why Chinese consumers like to buy luxury goods abroad may be more complicated than imagined.

For example, Zhou Ting, President of the Institute of quality and quality research, believes that besides the obvious price discrepancy caused by tariffs, consumers prefer overseas consumption.

"Despite the difficulties encountered in China's local market, the strong purchasing power of Chinese consumers still makes international brands continue to attach importance to Chinese consumers.

And this kind of external heat and internal cooling situation also let them start thinking about how to take the next step in China's luxury market.

One industry insider said.

Low-key high-end

With the decline of China's luxury market, Chinese consumers will not be able to buy luxury goods regardless of their cost, and then they will become history. But after the market has entered a period of shock adjustment, a new shopping trend has begun to rise gradually among Chinese consumers.

Some even believe that the rise of this fashion will undoubtedly give a bright path to the pformation of luxury brands in the Chinese market in the future.

The Wall Street Journal reported recently that luxury underwear valued at $300 is still selling well in the face of the overall decline in luxury consumption in the Chinese market.

Italy underwear manufacturer La Perla has been unable to sell $2000 in high-end underwear such as strapless bra in the region, but sales in mainland China, Hongkong and Taiwan increased by 42% last year.

Last month, La Perla opened a new men's underwear store in Shanghai, selling 200 dollars of silk shorts and 3000 dollars of silk pajamas.

Agent Provocateur, a high-end lingerie based in London, said its sales in China's four stores were at least 25% higher than expected.

A salesperson in Beijing said the best seller included a white bra with a value of RMB (6.2482, 0.0000, 0%), 1475 yuan (RMB), and a 1940 yuan black lace bra.

Reported that in the past, Chinese consumers were known for their hobbies of customized handbags and gold lined iPhone cell phone shells, but at present, under the government's campaign to save money, they are trying to avoid showing off their wealth, such as displaying luxury goods such as the shining brand LOGO.

Sales of luxury goods, including jewellery and clothing, fell by 1% in China last year, according to Bain consulting.

Now, many Chinese have begun to hide their wealth in clothes.

Neil Wang, head of Frost & Sullivan Greater China, a consultancy, said sales of high-end underwear continued to increase since 2012, accounting for 30% of the total sales of underwear last year.

Market watchers say that although demand for luxury goods has been reduced, they are still continuing.

"People still want a secret indulgence."

Tom Doctoroff, Asia Pacific CEO of JWT advertising agency, said.

The emergence of such a fashion has also helped some people in the industry to pick up confidence in the Chinese market.

There is a view that the decline of China's luxury market in 2014 may mean "turning point" after the era of rapid growth. Luxury brands need to adjust their strategies according to the characteristics of Chinese consumers, and farewell to the era of "site warfare" has become inevitable.

In order to catch the hearts of Chinese consumers, luxury brands must adapt to their ever improving shopping taste and a more low-key manner, changing their mindset from "where to look for growth" in the past to "trying to create growth".

"For the Chinese market, the challenges faced by luxury brands are inevitable."

An industry insider said, "but it is certain that the era of easy picking has basically come to an end."