Consumers opting for memories
By Emily Ford |
June 6, 2012, Wednesday
|
Print Edition
Print Edition
Wealthy consumers are increasingly seeking out memorable experiences over luxury goods in a premium market that has now hit US$$1.4 trillion a year, according to the latest survey.
Spending on top-end safaris and other intangibles now accounts for 55 percent of all luxury spending - US$770 billion - as consumers choose to splurge on memories over handbags or watches, according to the Lux Reduxe report by Boston Consulting Group and research firm Ipsos.
The world's younger affluent consumers are those most likely to choose kite-surfing over Cartier, as people born after 1980 are more likely to define themselves by what they've done rather than what they have acquired.
"Even in brand-obsessed China, where personal luxury goods serve as a strong badge of status and success, experiential luxury dominates, growing at 28 percent each year," the report says.
China has an estimated 1 million dollar millionaires who are, on average, 15 years younger than their counterparts in the West, according to the Hurun Report.
Dr Junsong Chen, a lecturer in the Department of Marketing at the China-Europe International Business School in Shanghai, said the trend for "experiential luxury" was beginning to be noticed in China.
"In China people tend to spend more money on tangible goods than on experiences, as they traditionally prefer to buy things which they can touch and own. But among those who consume luxury goods it can be a different story," he said. "The foundation of all luxury goods purchases - whether it's a watch or a car - is to give you an identity. I think in China people are starting to resort to experiences as a way to identify themselves."
China's luxury goods sales are currently rising at a rate of about 22 percent a year and the country is expected to become the world's biggest market for luxury goods in 2015, the Boston group said.
Wealthy Chinese consumers in Shanghai or Beijing in particular are seeking out exclusive experiences, Chen said, citing the example of private golf clubs charging 500,000 yuan (US$78,350) in membership fees and the rise of sports car clubs.
Researchers surveyed 1,000 consumers in eight developed markets and the four leading emerging markets of Brazil, Russia, India and China.
Spending on top-end safaris and other intangibles now accounts for 55 percent of all luxury spending - US$770 billion - as consumers choose to splurge on memories over handbags or watches, according to the Lux Reduxe report by Boston Consulting Group and research firm Ipsos.
The world's younger affluent consumers are those most likely to choose kite-surfing over Cartier, as people born after 1980 are more likely to define themselves by what they've done rather than what they have acquired.
"Even in brand-obsessed China, where personal luxury goods serve as a strong badge of status and success, experiential luxury dominates, growing at 28 percent each year," the report says.
China has an estimated 1 million dollar millionaires who are, on average, 15 years younger than their counterparts in the West, according to the Hurun Report.
Dr Junsong Chen, a lecturer in the Department of Marketing at the China-Europe International Business School in Shanghai, said the trend for "experiential luxury" was beginning to be noticed in China.
"In China people tend to spend more money on tangible goods than on experiences, as they traditionally prefer to buy things which they can touch and own. But among those who consume luxury goods it can be a different story," he said. "The foundation of all luxury goods purchases - whether it's a watch or a car - is to give you an identity. I think in China people are starting to resort to experiences as a way to identify themselves."
China's luxury goods sales are currently rising at a rate of about 22 percent a year and the country is expected to become the world's biggest market for luxury goods in 2015, the Boston group said.
Wealthy Chinese consumers in Shanghai or Beijing in particular are seeking out exclusive experiences, Chen said, citing the example of private golf clubs charging 500,000 yuan (US$78,350) in membership fees and the rise of sports car clubs.
Researchers surveyed 1,000 consumers in eight developed markets and the four leading emerging markets of Brazil, Russia, India and China.
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