Today, Daxue-Consulting will analyze the Luxury Gifting Market in China.
Definition of Luxury Goods: “products and services that are not considered essential and are associated with affluence.
The concept of luxury has been present in various forms since the beginning of civilization. Its role was just as important in ancient western and eastern empires as it is in modern societies.
With the clear differences between social classes in earlier civilizations, the consumption of luxury was originally limited to the elite classes. More information about Luxury Goods…
Luxury Goods for Gifting in China
Gifting is a crucial and indispensable social behavior in China no matter whether it is for private connections or for business etiquette. Based on a series of qualitative interviews and opinions collected from the company’s sales representatives, the gifting market could be segmented into three sections depending on the way it works and the purpose of the offering.
These 3 segments are is spouse or boyfriend/girlfriend, especially for mistresses, family and friends, and finally business partners.
As for the business partners group, we can find out that private companies usually play the role of gift-giver who often grate partners with cash, and provide government officials and state-owned companies’ staffs with different types of real products depending on occasions – such as electronic products (Apple) for small services, luxury goods around RMB 10,000 to 20,000 (handbags) for more important services, and even more expensive luxury goods for strong interest relations (timepieces). More information about Luxury Market in China!
Unveil the Special Consuming Behavior of Luxury Gift
When we talk about what type of luxury products is most preferred by whatever gift-giver or gift-receiver for business occasions, a report written by Exane BNP Paribas displays the following results: new collections of handbags priced between RMB 10, 000 and 20, 000 are always the first choice. Wallet ranks second priced at RMB 4, 000 to 6, 000. For a lower level of gift, scarves priced at RMB 2, 000 to 3, 000 are favored by gift-givers. However, because of the uncertainty of the recipient’s size, givers often avoid offering shoes, belts, and other accessories as a gift. Besides Louis Vuitton and Gucci, Chanel (for women) and Prada (for men) become popular among gift-givers.
As for the locations where people buy those precious and valuable gifts, answers vary a lot. If a present is used for family members or friends, gift-givers always purchase it when they go abroad or to Hong Kong and mainly focus on duty-free and lower prices than in Mainland. Once the gift is offered for a business purpose, purchasing companies would like to get agreements with local luxury goods companies to enable gift-receivers to select the products they prefer in the store. Relevant bills could be debited on the account of purchasing companies (gift-givers). What’s more, the purchasing policy of luxury brands also stimulates gift-givers to buy gifts in mainland China but not abroad or in Hong Kong.
For instance, the receiver is allowed to exchange products from Louis Vuitton within 30 days after purchasing and within 14 days in Gucci stores.
The Performance of Chinese Macroeconomy’s & The Policy of New Leadership
Due to the global recession, China has been affected by this great financial crisis. According to the National Bureau of Statistics analysis in China, from 2008 to 2012, Chinese macro-economic growth experienced an up-and-down fluctuation around the 2011 average GDP growth of +9.3%. The lowest quarterly figure that was recently published is +7.4% in Q3, 2012. At the same time, the manufacturing industry and investments in CAPEX faced an unprecedented deceleration.
Last spring, new leaders were appointed in Beijing. The new team showed a firm determination to tackle corruption. As a result, it is apparent that dinners and gifts – which used to be offered with luxury goods – are going to be targeted and regulated more and more with strict standards.
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