Luxury - Beyond Summits Ltd...Source：Bain & Company, China Luxury Market 2015© 2016 Beyond Summits 6 Cosmetics, Fragrances, Products for Personal Use Watches Bags and Luggage Menswear

Luxury

© 2016 Beyond Summits

Summary：

• China’s luxury market scale dropped by 2% to CNY113 billion in 2015 year on year. Declining

sales in watches, menswear, bags and luggage were the main reasons triggering the downturn

luxury market, especially in north China and northeast China.

• Sales and customers of luxury stores and emerging brands have decreased year on year.

Some following consequences were caused, such as the close of brand stores, more cautious

about online store expansion, more efforts in the maintenance and renovation of core stores.

• Luxury consumers are more willing than before to participate in digital channels, thus brands

will keep on expanding their digital marketing platforms. Some brands are already testing their

online channels now（official websites or third-party platforms）.


2


3

• Since 2012, the government has

increased the anti-

corruption efforts, causing the

consumption decline of luxury

goods.

• The government lowered the import

tariffs of luxury goods, added and

restored duty-free shops at foreign

trade ports, formulated the policies of

inspection and quarantine supporting

cross-border e-commerce, cleared the

unreasonable fees. These policies

resulted in the boom of luxury

consumption and created a better

environment for cross-border e-

commerce in luxury industry.

• China’s GDP has continued to

grow year by year. The economic

growth promoted the

development of luxury industry

and the upgrade of consumption

products.

• In 2015，China’s overall scale of

individual investible assets and

the number of high-net-worth

individuals have continued to rise,

boosting the consumption of

luxury goods.

According to the investigation from

World Luxury Association, Chinese

buyers of luxury goods gradually

showed a younger age. The age of

consumer group decreased from 35

years old to 25 years old on average,

which had some influence on the

marketing and promoting ways in

luxury industry.

Policy Factor Economic Factor Social Factor

Features of China’s Luxury Industry

106

116 115

113

0

20

40

60

80

100

120

140

2012 2013 2014 2015

China’s Luxury Market Scale (CNY billon)

30%25%

20% 18%

22%25%

30% 32%

15% 15% 13% 12%

11%10% 13% 11%

6%7% 5%

6%

6% 6% 7% 8%

5% 5% 6% 7%

5% 7% 6% 6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015

China’s Luxury Market by Products

Accessories

Womenswear

Shoes

Jewelry

Menswear

Bags and Luggage

Cosmetics,Fragrances,Productsfor Personal UseWatches

Source：Bain & Company, China Luxury Market 2015

China’s luxury market was going through a recession in 2015, mainly caused by anti-corruption,

slowdown in economic growth, and stock market collapse in the second and third quarter of 2015.

Luxury consumption in watches, bags & luggage, and menswear dropped significantly.


4

In 2015, CAGR of womenswear marked the highest in China’s luxury market, up by 10% than

2014. CAGR of menswear declined to the lowest point at 12%.


5

5%

-10%

-5%

-12%

7%

10%

-6%

2%

-15%

-10%

-5%

0%

5%

10%

15%

Cosmetics etc Watches Bags andLuggage

Menswear Jewelry Womenswear Accessories Shoes

CAGR of China’s Luxury Market （2015 vs 2014）

Source：Bain & Company, China Luxury Market 2015 Note: CAGR = Compound Annual Growth Rate



6

Cosmetics, Fragrances,

Products for Personal

UseWatches

Bags and

LuggageMenswear

CHANEL

Dior

Estee Lauder

LANCOME

LANEIGE

Top 5 Luxury Brands in Mainland China

Cartier

Longines

OMEGA

ROLEX

Tissot

COACH

GUCCI

HERMES

LOUIS VUITTON

PRADA

Armani

HUGO BOSS

Burberry

Dior

Zegna

Jewelry Womenswear

BVLGARI

Cartier

CHOW TAI FOOK

Tiffany

Van Cleef & Arpels

Armani

Burberry

CHANEL

Dior

Max Mara

Accessories Shoes

Zegna

GUCCI

HERMES

LOUIS VUITTON

Montblanc

CHANEL

GUCCI

LOUIS VUITTON

Ferragamo

TOD’S


7

Luxury goods that Chinese consumed in Hong Kong and Macao showed a decline to 12% in 2015,

down from 18% in 2014. Yet the consumption for luxury goods in Japan increased significantly.

Cross-border e-commerce and overseas websites have sprung up, accounting for 12% of China’s

luxury consumption, and 46% of mainland Chinese consumers purchased luxury goods in these

ways.

30% 28%

18%12%

6%

7%

14%

11%

16%

19%

2%

5%

4%5%

10% 13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2014 2015

Luxury Consumption outside Mainland China

Others

South Korea

Japan

Europe

US

Taiwan

HongKong/Macao

MainlandChina

61%

46%

0%

10%

20%

30%

40%

50%

60%

70%

Procurement Service Cross-border E-commerce & Overseas Websites

How Mainland Chinese Consumers Purchased Luxury Goods

Source：Bain & Company, China Luxury Market 2015 Note: Only for the consumers living in mainland China


8

Outlet stores are important channels to buy low-price luxury goods for Chinese consumers. Outlet

stores have expanded in recent years in mainland China, rising to 138 in 2015.

40

52

68

83

98

138

30.0% 30.8%

22.1%

18.1%

40.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

20

40

60

80

100

120

140

2010 2011 2012 2013 2014 2015

Number of Outlet Stores in Mainland China

Number (unit) Growth Rate



9

Up to the end of 2015, the number of Armani stores reached the highest at 145 among some

luxury brands in mainland China. Next came COACH and HUGO BOSS. Moreover, some brands

began to close the stores, and held cautious attitude in new stores’ expansion.

154

136

115

115

111

74

60

60

56

56

55

45

44

40

36

36

36

33

30

28

22

22

12 11

Armani

COACH

HUGO BOSS

Montblanc

Dunhill

Ferragamo

Bally

CUCCI

Michael Kros

Zegna

Burberry

Bottega Veneta

LOUIS VUITTON

PRADA

Cartier

MCM

Versace

D&G

Tiffany

BVLGARI

Dior

HERMES

Tory Burch

CHANEL

The Number of Luxury Stores in Mainland China (2015)



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With the rapid development of Internet, Chinese consumers relied on Internet and App to get

luxury information. Among all Internet access, official websites and news websites were the most

popular channels to obtain luxury information. However, Weibo and App has sprung up in offering

luxury information.

78%

31%

29%

20%

8%

7%

Internet & App

Magazine

Friend

Salesmen in Stores

TV Ads

Email

Access to Get Luxury Information for Mainland Chinese Consumers

60%

37%

31%

30%

29%

28%

9%

9%

Official Websites

News Websites

Weibo

App

WeChat

Celebrity Blog

BBS Forum

Video

Internet Access to Get Luxury Information for Mainland Chinese Consumers

Growth rate

2015 vs 2014

+3%

-4%

+1%

-2%

-1%

-2%

Growth rate

2015 vs 2014

-10%

-4%

+9%

+6%

+2%

+5%

0%

0%



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China’s luxury consumers tend to be more willing to consume in entertainment industry. Compared

with 2014, more consumers would choose experiential luxury consumption in 2015, and the

consumption in luxury hotel and resort marked the highest proportion.

55%

36%

28%25%

8%

58%

37%

33% 33%

9%

0%

10%

20%

30%

40%

50%

60%

70%

Luxury Hotel & Resort Luxury Spa High-level Tourism Luxury Cruise Private Charter Service

Proportion of Consumers Choosing Experiential Luxury Consumption in China

2014 2015



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An increasing number of high-net-worth individuals, consumption upgrade, and higher standard of

China’s luxury industry had brought positive influence in China’s luxury industry.

Clothing

Under the condition of

e-commerce, the third-

party luxury e-

commerce and its

value-added service

will become the

consumptive growth

point in luxury clothing

industry.

Food

With the innovation of

technology and the

deepening of human

cognition, the

innovation of health

products will show a

direction for how high-

end food should

develop.

Housing

Intelligent furniture will

become the

consumption growth

point in luxury home

decoration.

Transportation

Aircraft leasing will

play a leading role in

rental market.

Entertainment

High-level tourism will

be the breakthrough

in tourism industry.

Meanwhile, customized

route of high-level

tourism will further cater

to the consumption

concept of tourists.

1 2 3 4 5

Source：Zero2IPO Research, China Luxury Industry Report 2015


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According to Zero2IPO Research, the investment amount in China’s luxury industry was in uptrend

in 2015. Clothing shelter and entertainment accounted for the largest proportion with 55.2% and

24% respectively.

Source：Zero2IPO Research, China Luxury Industry Report 2015

3.4

2.5

3.3 3.4

2.8

3.8

0

1

2

3

4

5

2010 2011 2012 2013 2014 2015

Investment Scale in China’ s Luxury Industry

Investment（CNY billion）

Clothing Shelter, 55.2%

Entertainment, 24.0%

Housing, 19.7%

Transportation, 0.9%

Food, 0.2%

Investment in Segmented Market of China’s Luxury Industry (2015)

Intending to Purchase, 90%

Not Intending to Purchase, 10%

Purchasing Intention of Chinese Consumers on Luxury Goods for the Next Year(2015)

Source：FT China, Luxury Market Report 2015

10% of consumers who purchased luxury goods last year had no intention to buy luxury goods

next year. Percentage of consumers who intend to spend over 50 thousand RMB on luxury goods

didn’t change much, and percentage of people spending below 50 thousand RMB increased.


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Luxury - Beyond Summits Ltd...Source：Bain & Company, China Luxury Market 2015© 2016 Beyond Summits 6 Cosmetics, Fragrances, Products for Personal Use Watches Bags and Luggage Menswear