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Ruder Finn/Ipsos China Luxury Forecast 2012 Reveals Major Change in Spending Patterns

2011-04-19

Luxury shoes, cosmetics, and wines, spirits are winners in slowing, cautious market

  • Louis Vuitton leads all-European group of top 10 luxury brands in China
  • More Chinese buying luxury products in exclusive brand stores on the Mainland rather than splurging overseas
  • Social media plays more important role in influencing consumers

The Ruder Finn/Ipsos China Luxury Forecast 2012 reveals that the luxury goods market is still relatively growing in a cautious China market and significant new consumer spending patterns are emerging.

The Ruder Finn/Ipsos China Luxury Forecast was conducted in June and surveyed 1135 luxury consumers on the mainland who earned more than RMB 100, 000 annually. About 69% were under the age of 35 reflecting the booming potential of luxury consumer market in China.

"In the past 12 months the luxury market was going strong but we see consumers are cautiously planning for the next year because of the economic news they keep reading about and this could lead to a relative slowdown. But they will not stop shopping. They will just be buying different luxury items," says Simon Tye, Executive Director of Ipsos.

Luxury-brand watches appear to be off the shopping list with 54 percent of respondents saying they plan to spend less on watches over the next 12 months. Hand bags (48% of respondents) and jewelry (48%) are also not priorities for the coming year. But respondents said they would increase spending on luxury cosmetics (43%), high-end shoes (43%), and top-brand wines, spirits and cigars (40%).

Elan Shou, Managing Director and Vice President of Ruder Finn Asia said Chinese consumers buy luxury products mainly to reward themselves and to reflect their taste, personality and build confidence and will continue to do so this year. "We are seeing a change in spending patterns, not a drop in the desire for luxury items," Ms Shou says.

One aspect of the luxury market that has not changed was the status of established luxury brands in the Chinese mindset. According to the Ruder Finn/Ipsos China Luxury Forecast, Louis Vuitton was ranked No.1 with a Top of Mind (TOM) awareness of 39% (without prompting) and a spontaneous recall (Spon) of 65%. The French fashion icon was followed by nine other European big-name brands.

Rank

Brand

Category

Country

TOM

Spon

1

Louis Vuitton

Fashion

France

39

65

2

Chanel

Fashion

France

17

50

3

Gucci

Fashion

Italy

7

41

4

Hermes

Fashion

France

6

28

5

Christian Dior

Fashion

France

5

30

6

Armani

Fashion

Italy

4

19

7

Rolex

Watch

Switzerland

3

21

8

Cartier

Watch

Italy

2

15

9

Prada

Fashion

France

1

17

10

Versace/ Versus

Fashion

Italy

1

9

One of the major changes is that China itself has become the major destination for buying luxury goods in 2012 replacing Hong Kong and Europe in the 2011 survey. And exclusive brand stores are the most popular point of sale for Chinese consumers to purchase luxury goods.

However, there has been a major spark in online shopping with an average of 10% of luxury goods purchased via the Internet (about 17% of luxury cosmetics were bought online). Considering the relatively young age of the consumers, almost 80% use or intend to use social media to understand more about luxury brands and products.

ENDS

The full Ruder Finn/Ipsos China Luxury Forecast 2012 will be for sale in mid August, 2012.

DISCLOSURE: Chanel, Hermes, Armani and Cartier are or have recently been Ruder Finn clients.

Media Contact

Patrick Whiteley, Ruder Finn, Beijing

whiteleyp@ruderfinnasia.com

(86-10) 6462 7321 ext. 650

Mobile: +86 18611115761

About Ruder Finn Asia

Ruder Finn, Inc. is one of the largest independent integrated communication firms in the world, with offices in the United States and Europe, as well as in Beijing, Shanghai, Guangzhou, Hong Kong, Singapore and New Delhi in Asia.? Through these offices and our affiliates worldwide, the agency serves the global and local communication needs of over 250 corporations, governments and non-profit organizations.? For more than 60 years, the Ruder Finn name has been synonymous with excellence in communications. Ruder Finn’s global strategic focus is on four operational pillars which constitute the core of our growth – Health & Wellness, Corporate & Public Trust, Global Connectivity and Life+Style.

In Asia, Health & Wellness includes GE Healthcare, Mead Johnson, Novartis, Pfizer, Roche, Sanofi and Weight Watchers. Corporate & Public Trust includes L’Oreal, Founder Group, Michelin, Boeing, Bosch, Volkswagen, Citic Bank, Singapore EDB, Visa and?LANXESS. Life+Style includes luxury brands like Cartier & Piaget from the Richemont Group, Givenchy from the LVMH Group, as well as Hermes, Bang & Olufsen, Lamborghini, Tod’s, Breitling and the Jumeirah Group. Global Connectivity includes DHL, Emirates and Hawker Beechcraft. Those four pillars are supported by award-winning divisions such as RFI, focusing on Interactive, Social Media and ePR and INSIGHT which focuses on research and trends, producing the China Luxury Forecast and the CSR Index with Tsinghua University. For more information on Ruder Finn, please visit www.ruderfinn.com or www.ruderfinnasia.com, or Chinese website?http://cn.ruderfinnasia.com

About Ipsos

Ipsos, The Home of Researchers

Founded in France in 1975, Ipsos is the only independent market research company that is controlled and managed by research professionals. In October 2011 Ipsos completed the acquisition of Synovate. The combination forms the world’s third largest market research company. With offices in 84 countries, Ipsos has the resources to conduct research wherever in the world our clients do business. Working both on a global scale and in local markets, our expert teams give our clients the benefit of high value-added business solutions including qualitative, forecasting, modeling, market knowledge and consumer insights. Ipsos professionals deliver insightful expertise across six research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of ??1.14 billion ($1.6 billion U.S.) in 2010.

Visit www.ipsos.com to learn more about Ipsos’ offerings and capabilities