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Insight of the Day: Chinese opt for more discreet outfits due to "luxury shame"

Luxury Goods Market Slows Down as Chinese Consumers Become More Discreet

Key Findings:

  • Slowdown in Luxury Market: Global sales of personal luxury goods are expected to grow between 0% and 4% in 2024, the weakest performance since 2020.

  • Shift in Chinese Consumer Behavior: Wealthier Chinese consumers are opting for more discreet fashion due to economic uncertainty and "luxury shame."

  • Understated Luxury:  Instead of flashy items, Chinese consumers are now preferring understated luxury products and private shopping experiences.

  • US Market Recovery: The US luxury market is showing signs of recovery, driven by wealthier buyers.

  • Tourism Boost in Europe and Japan: The return of foreign tourists is expected to boost luxury sales in these regions.

Key Takeaway:

The luxury goods market is experiencing a slowdown, particularly in China, due to changing consumer preferences and economic factors. However, signs of recovery are emerging in the US, Europe, and Japan.

Trend:

The trend of "luxury shame" and the preference for understated luxury is gaining traction among Chinese consumers, reflecting a shift away from conspicuous consumption.

Conclusions:

  • The luxury goods market is facing challenges due to economic uncertainty and changing consumer preferences.

  • Brands need to adapt to the evolving landscape by offering more discreet and understated luxury options.

  • The US, Europe, and Japan are showing promising signs of recovery in the luxury market, driven by tourism and demand from wealthier consumers.

Implications for Brands:

  • Adapt to Changing Preferences: Offer a wider range of understated luxury products to cater to the growing demand for discreet fashion.

  • Focus on Value and Quality: Emphasize the quality and craftsmanship of products to justify higher prices.

  • Personalized Experiences: Offer exclusive and personalized shopping experiences to attract discerning consumers.

  • Diversify Markets: Explore opportunities in emerging markets like Southeast Asia, India, and Mexico, where the middle class is growing.

  • Invest in Digital: Enhance online presence and offer seamless omnichannel experiences to cater to changing shopping habits.

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