While the Russia-Ukraine conflict exacerbates the uncertainty with which 2022 began, the world of luxury continues to look towards China. The People’s Republic, in fact, was confirmed as one of the markets that reacted best to the pandemic. And, far (at least physically, considering the travel ban still in force) from the winds of war, it continues to be a geographical priority for luxury companies. The challenge is to understand the needs and desires of a constantly evolving audience, the Chinese one. And who loves made in Italy.
Leather goods up 60% in 2021. That’s who the customers are
According to Bain & Co in 2021 the luxury goods market in China grew by 36% – almost doubling in sales compared to 2019 – and the prospect is that the former Celestial Empire will become the first luxury market by 2025. Among the best performing segments there is the luxury leather goods, which recorded an increase of 60 percent, reaching 8.5 billion dollars, equal to 28% of the luxury goods market. Especially thanks to the very young: exponents of Gen Z who live not only in Tier 1 and Tier 2 cities and who are developing an extremely personal taste, orienting themselves less towards brands and more towards high-profile artisan products.
Not (anymore) just big brands
The latter estimate comes from the Chinese digital marketing agency Hylink Digital Solutions which operates as a “bridge” between Italian (and non-Italian) luxury companies and Chinese consumers. An audience that, during and after the pandemic, has transformed: “The pandemic has increased online purchases, which in China were already widespread – explains Yuan Zou, Hylink’s head of luxury and fashion Europe – also changing the way we shop : before you bought a product to get noticed, today you choose a product because it is appreciated in terms of creativity, craftsmanship, manufacturing. You buy for yourself, not to show it to others, with the desire to demonstrate that you have a unique style, standing out from the crowd ». An evolution that can represent an important asset for Made in Italy: “The Chinese have a strong bond with Italy: from the time of Marco Polo to the” One belt, one road “policy – continues Zou -. The appeal of Made in Italy remains high and the products of Italian companies embody that mix of high quality, aesthetics and attention to detail “. Among the best-selling products there are bags, also in unisex version: «Girls make extensive use of purses or bags designed for men to make their look more casual and informal. For Chinese “fashionist” men, on the other hand, showing off an It bag, that is an iconic bag of a particular brand, has become essential to complete their look », Hylink said.
Sustainability and second hand
Then there is the growing attention to sustainability: “Chinese young people have developed a much more conscious approach than imagined. They have experienced what it’s like to live in very polluted cities, ”says the manager. Ecological reasons also push towards increasingly “circular” shopping: second-hand luxury goods in China represent about 5% of the luxury goods market, with an estimated value of about 2.7 billion dollars.
If Italy has always been at the top of the list of tourist destinations to visit, even for shopping – “for reasons of price, but above all for the variety of products”, specifies Zou – now that the borders of the People’s Republic are closed Italian companies having to go to China. The preferred channel is the web, with an obligatory presence on platforms such as Wechat (which has 450 million active users per day) or social networks such as Weibo and Little Red Book: a product sported by one of the Kol (key opinion leaders, Chinese influencers) as Mr Bags can run out in minutes. Or even less: as Hylink points out, thanks to the collaboration with Kol Austin Li, Bottega Veneta managed to sell 230 Mini Pouch bags worth $ 1,910 each in 10 seconds.
The importance of the physical shopping experience
E-commerce and social commerce, therefore, are the favorite channels of the Chinese Gen Z. Yet the shopping experience cannot end here: “During the pandemic, the Chinese bought products online and the priority was fast, contactless deliveries. But then things changed: especially with regard to luxury products, the in-store experience remains essential because it gives you the opportunity to touch the product, for example. So we advise Italian brands not to limit their presence in China to digital channels, but to think about opening at least one pop-up store “.