Canada Goose’s success has been driven by its expanding retail presence, improved consumer experience and more localized product assortment, the company told Vogue Business.
What does the future hold for China’s luxury market?
Looking to the second half of the year, Zhou Ting, director of Shanghai-based luxury research firm Yaoc Research Institute, predicts that “the downward trend will ease and consumer outflow will be partially contained. Growth will be expected but will be slow, with annual growth probably in the single digits.”
Will the shame of luxury remain?
D’Arpizio says a lot depends on the Chinese government and whether it starts to boost consumption to jump-start the economy. But she points out that it’s unlikely to last forever: “Even the previous luxury recession, the result of a more severe crisis in the US, was not a permanent phenomenon. It’s unclear how long it will last in China, but China remains the most strategic market for brands, so they will continue to invest.”
“Although the economy is facing difficulties, the overall Chinese market remains large,” agrees Li. He suggests that brands should move away from a strategy that relies too heavily on celebrities and seek out more diverse marketing methods to better appeal to customers. Lau adds that personalized service, unique shopping experiences, and thorough localization are also key to winning in the Chinese market.
Thomas Pierchot, head of strategy at luxury data solutions agency Re-Hub, believes luxury brands should also pay attention to building meaningful cultural connections with their customers. For example, brands can offer escapism, a sense of wonder and a sense of community, acting as a catalyst for connection rather than alienating customers.
“Luxury brands need to stay relevant to everyday consumers amid these changes, as everyone in China, not just VIPs, has a say in brands,” concludes Yalin Zhang, founder of consumer-centric consultancy ApertureChina.
Key takeaway: China is no longer an easy market to win. As the wealthy leave the country, the middle class is cutting back on spending, leading to a significant decline in domestic luxury demand. Brands can still capitalize on the opportunity by developing culturally appropriate strategies and offering innovative designs. Cautious sentiment around luxury spending in China won’t last forever, but growth in the second half of the year may depend on government messaging around consumption.
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