Demand for luxury goods remains strong in mainland China, while Hong Kong’s counterparts are showing lesser intent in luxury purchase, according to a recent consumer confidence survey by Ruder Finn and Consumer Search Group (CSG).
The report reveals that Hong Kong and China customers value ‘Chinese’ elements differently when it comes to purchasing products or services. A majority 58% of China respondents said that ‘embedded Chinese elements’ were ‘extremely or very important’, compared to sentiment in Hong Kong which barely reached double figures at just 11%.
Diving deeper into Chinese elements in luxury products, a majority 55% of Chinese consumers said they appreciated “elements symbolising good luck,’ compared to only 25% of Hong Kong consumers.
When it comes to e-commerce, customers have also indicated higher confidence in spending online without having visited physical stores before purchasing, with an average number of two visits, down from 2.3 and 2.6 visits in China and Hong Kong respectively in 2015. When it comes to social media, word of mouth is the key influencer, surpassing celebrities, luxury communities and key opinion leaders.
According to the annual China luxury forecast, it shows that 42% of consumers in China are looking to spend more on luxury items across all categories, but in Hong Kong this figure has fallen to just 25%, a drop from 2015’s figure of 30%, further reinforcing last year’s conservative approach by consumers in the SAR.
The China luxury travel market continues to grow year-on-year, with Chinese luxury consumers taking four domestic and three international trips, while in Hong Kong luxury consumers take 3.7 international trips annually.
Interestingly, for China consumers ‘culture and history’ was the top factor when deciding travel destinations at 63%, while Hong Kong consumers most valued ‘transportation convenience at 50%. The second most identified factor in both market was ‘shopping options’, with 46% and 47% in China and Hong Kong respectively.
Japan, Taiwan and China are the top three destinations for Hong Kong consumers, while the city tops the list for Chinese luxury travellers, followed by France and Japan.
“With increasing foreign travel comes increasing foreign purchases, made by a demographic with clear motivations and strategies when it comes to their luxury lifestyle. It’s also clear that optimising the online customer experience remains more crucial to success than ever.” said Gao Ming, SVP and general manager luxury practice China of Ruder Finn Asia.
Surveying 1,341 consumers across China and Hong Kong, the report covers Greater China with 1,040 consumers from over 120 cities in China and 301 consumers from the Hong Kong. 300 of consumers were from first tier cities, 400 from second tier cities, and 340 from third tier cities. Average annual household income was RMB 833,509 in the mainland, and HKD 957,006 in Hong Kong.