China has been on the news almost all year round in 2015. It has been a turbulent year for China especially with their stock market's fluctuation, concentrated efforts on overseas luxury goods and anti-corruption operations. These campaigns, including incarceration of high-profile felons, during President Xi Jinping's term are some of the aspects that affected China's 2015 luxury market, according to Tech Node.
Using all these observations, Bain and Co., a management consulting firm, enlisted top factors that China should focus on handling well:
Deteriorating Luxury market in China
A two percent drop, equivalent to 113RMB billion or US$17.2 billion, on the procurement of luxury goods in mainland China happened in 2015. This extreme dive specifically hit handbags, men's wear, watches and suitcases sections.
Yahoo News reported that the projection of China's luxury market table suggests that the sales report of 2014 has dropped to ten percent from 2013, while 2015 will drop to 12 percent from 2014.
Macro environment will stay the same
The middle class people is getting bigger and becoming more well-informed, and urbane about the luxury market in China.
E27 added that China's battle for bribery and anti-corruption acts greatly affected the sales of the luxury market. In addition, it is said that custom officials of China are continuously attacking Daigou market, which causes the sales drop of the luxury market.
Daigou
Once Daigou deteriorates, stabilization of overseas channels will happen. Consumption localization will stimulate domestic growth and government should monitor the localization and other brand will take control as well.
Focus on local digital content creation and fortify digital platform
Luxury brands should engage in creating apps that will put importance in reflecting preferences for the local market.
For luxury brands: Focus on more stylish and youthful designs
Going-with-the-flow style should be significant to luxury brand designers. Innovative designs, with sense of singleness, attract attention of buyers in aspects of design and store footprint.
Luxury brands should consider flexible pricing on their goods to stay on top of the list, and keep its local consumers intact. Shoppers are becoming much wiser nowadays that's why luxury brands should consider reducing local pricing, added by Bain and Co.