5 WAYS RICH CHINESE GEN ZERS ARE REDEFINING LUXURY
- Chinese Gen Z shoppers are prioritizing craftsmanship and brand stories over luxury labels.
- Experts say this generation values sustainability, slow living, and mindful consumption.
- Gen Z's preference for understated luxury aligns with China's crackdown on flashy wealth displays.
Chinese buyers continue to be passionate about luxury goods.
And though Chinese consumers' belts have been tightening as the economy falters and luxury brands feel the effect, the country is expected to become the world's largest personal luxury market by 2030.
Luxury players are now thinking about how to attract the next cohort of shoppers: Gen Z, generally defined as those born from 1997 onward.
Experts say this generation has different preferences when it comes to luxury versus their millennial and Gen X counterparts.
1. Gen Z is focused on craftsmanship
China's Gen Z shoppers are less concerned than their Western counterparts about status symbols like luxury labels or logos, prioritizing instead "the perceived value of an experience or story behind an object of luxury," Jien Goh, a trend forecaster at WGSN, told Business Insider.
This means Gen Z buyers are more interested in items' craftsmanship and how the story or emotions associated with the company can be reflected in them, she added.
Writing for Jing Daily, Daniel Langer, a professor of luxury strategy at Pepperdine Graziadio Business School, noted that a brand like Gucci is struggling in China right because it has maintained a "product-focused" approach rather than a "client-centric" one.
Brands that have succeeded with incoming Gen Z buyers have developed intricate stories about their brand and, subsequently, the wearer, experts say.
2. Sustainability and slow living are trending
The newest generation of luxury shoppers in China also wants to incorporate their values into their purchases.
Goh said WGSN had been tracking a "rural revival" trend in the Asia Pacific region, particularly in China.
"At the heart of this trend lies a desire for mindful, slower-paced living and a newly emerging mindset that sees wellness and longevity as the ultimate marker of luxury," she said.
Elisa Harca, cofounder of consultancy firm Red Ant Asia, told BI she had noticed a similar movement.
She has seen cultural trends, such as choosing to take career breaks rather than aggressively climbing the corporate ladder, filter into Gen Z purchasing patterns.
For example, there has been an uptick in consumers "choosing to spend on items to add to their lifestyle experience versus just materialistic buys," like health and wellness-related brands, Harca added.
3. They are done with flashy logos
China's leader, Xi Jinping, has been cracking down on overt online displays of wealth, and some social media users' accounts have been blocked because of flashy posts.
Because of this, some Gen Z consumers have turned to quieter displays of wealth that align closer to Chinese representations of "old money."
Much like the West's "quiet luxury" trend, which dominated the fashion agenda in 2023, China's "laoqianfeng" trend means brand logos are out, and finer materials, muted colors, and natural makeup are in.
Goh said China's rich are undergoing an intergenerational wealth transfer "from first-generation ultra-affluents to younger generations that include Gen Z."
She said that compared to their self-made parents, Gen Z is much more "well-versed and sophisticated in their approach to luxury."
Addressing the needs of a "quieter" generation alongside the needs of longtime dedicated consumers of an older generation who are more inclined toward overt branding will likely require innovation from brands.
4. 'Luxury shame' is putting some young shoppers off altogether
Another reason Gen Z in China is looking for more muted displays of wealth could be due to "luxury shame."
Analysts at Bain noted this phenomenon in a June report. It is a desire for people to downplay overt displays of opulence during times of perceived financial crisis — something that happened in the US after the 2008-09 financial crisis.
This may partly explain the emergence of "a more rational cohort of luxury consumers," said Goh, who may be more inclined to be selective about how they spend their money.
5. They like to mix luxury with fast fashion
Harca said Gen Z is also more likely to mix and match when it comes to fashion.
"They might have a luxury bag, but wear a premium brand's pants and a fast-fashion brand's T-shirt," she added.
This allows Gen Z to "carve out their own style and shop where they think is 'them,'" she added, enabling them to be more unique in their fashion choices.
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2024-08-26T09:18:15Z dg43tfdfdgfd