Luxury Retail Drivers Differ for US & Chinese Consumers

A recent survey from Agility Research & Strategy has found that US and Chinese consumers behave differently when it comes to making luxury purchases. The survey looked at the different ways the two consumer populations think about and purchase luxury products..

Luxury and the US consumer
When asked ‘What comes to mind when someone says luxury?’ US consumers responded with high priced brands [for example, Mercedes Benz, Cadillac, BMW] and expensive categories [for example, a house, jewellery, a car]. American consumers also associated comfort, quality and packaging with luxury.

Amrita Banta, managing director of Agility Research says, “In this hugely competitive environment it is not surprising that US consumers do not view luxury as much in terms of individual brands, but rather think about luxury being expensive, high price purchases in general.”

Luxury and the Chinese consumer
Luxury means something different to affluent Chinese consumers, who tend to be younger and more likely to flaunt their purchases. Quality is seen as the defining marker of luxury and it is held in higher regard than price point, unlike in America. Fashion and car brands [including Hermes, Ferrari and Chanel] feature near the top of the list, revealing the importance of name recognition to Chinese consumers.

Luxury product drivers
The research undertaken by Agility Research revealed a difference in attitude towards luxury items in both markets.

– 56% of Chinese consumers said that brand recognition was important, whereas only 43% of Americans did
– Quality was important to consumers from both regions, with 72% of Americans agreeing and 86% of Chinese consumers saying that they bought luxury brands because of their higher quality
– American consumers were less likely to research products online (65%), compared to their Chinese counterparts (80%)
– Exclusivity provided the biggest difference in opinion: only 51% of US consumers thought it was important, compared to 86% of Chinese consumers
– The right price was important to 73% of American customers, but only 49% of Chinese consumers
– Chinese customers (59%) were more likely than their American counterparts (50%) to purchase products online

Top luxury brands in each region
The top luxury brands varied in each region. Chinese consumers favoured more upscale brands, whereas American consumers were more likely to purchase more affordable brands.

The table details the top brands for each category in each market.

Brand types American consumers Chinese consumers
Favourite luxury Coach, Ralph Lauren and Calvin Klein Chanel, Gucci and Burberry
Watches/jewellery Tiffany & Co., Guess, Gucci Dior, Gucci, Chanel
Cosmetics Olay, Clinique, L’Oreal Dior, Shiseido, SKII

This data comes from 3000 consumers from China, Singapore, HK and the US who were surveyed by Agility Research & Strategy during October 2014.