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Beware of the Chinese growing appetite for trendy niche fashion brands!

Last modified: April 23, 2015

Ostentatious luxury is no longer a thing in China ! Luxury goods used to be consumed by Chinese people in order to prove a certain social status and to show everyone else how wealthy you are.

The Chinese luxury market is getting more complicated, as customers now wants to distinguish themselves. We thought that the market was unstoppably growing, but instead, luxury brands now need to use different methods to approach the market and answer correctly to the new expectations expressed.

Discretion needed !

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Chinese Government is penalizing ostentatious behaviours leading to a decreasing tendency in sectors like luxurious watches or prestigious alcohols and spirits. These sectors were knowing 30% growth and it was lowered to a 7% growth in 2013. Moreover, a lot of taxes are applied within the Chinese territory which lead Chinese consumers to shop abroad, where 57% of luxury purchasing are made (against 20% in China). The shopping destinations preferred by Chinese consumers are Paris, New York, Hong Kong and Tokyo.

Consumers’ attitude towards luxury is deeply changing

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A phenomenon is happening, in the biggest cities of China, like Shanghai or Beijing, luxury consumers are claiming (65% of them) that they no longer want products where logos are too visible. This changing is more observable among youngsters. Young consumers (25-35) are more likely to shop designers’ labels that fits their personality and the lifestyle they aim at. However, middle class still represents a huge market for ostentatious luxury. This segment of population (New Rich) is still looking to display their wealth.

Distinguish yourself with niche brands

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The common tendency of Chinese luxury market was the purchasing of foreign brands. But, in order to differentiate themselves, it seems that Chinese consumers are now trying to go back to basics. By…shopping local! For example, Chinese fashion is knowing a great development and is gaining interest from Chinese consumers.

Chinese luxury consumers don’t want to buy names anymore, they want to wear something nobody has, fashionable, pretty much unique. That is why they are hardly seeking for luxury niche brands, the want to be and to feel exclusive by wearing a not-that-much-known brand and avoid getting mainstream owned items by huge brands.

The LVMH group totally understood this major issue by expanding in continental China brands like Celine or Loro Piana, identified as niche brands.

The new luxury consumer is sophisticated, has his personal style, isn’t looking for loads of huge brands but will rather look for new contemporary brands. Their new needs and expectations are pretty much similar to bohemian people (Bobo) you can find in great cities like Paris or New York. To give an example they would be more appealed by shopping in ‘Le Bon Marché’, ‘Colette’ or ‘BHV’ than Galeries Lafayette.

Social Medias are following the trend

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A website called Shangpin, has been launched to help Chinese consumers finding the new hottest designers of the moment, it is useful for consumers who are looking for non-famous niche brands but also for designers, to promote themselves on the Chinese market.

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3 thoughts on “Beware of the Chinese growing appetite for trendy niche fashion brands!”

  1. Pingback: Problems of Modern China (I) – The State of the Global & Asian Economy

  2. Very good article. I am interested to start a niche fashion brand in China. Where can I contact to get in touch? Craving some advice :))

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