Luxurious Lifestyles: Marketing to Chinese Millennials.

• Author: Noormohamed, Nadia Abgrab

1. WHO ARE CHINA'S MILLENIALS?

   In 2018, there were more cash-rich millionaires reported in China than in any other nation, accounting for one-third of overall global luxury purchases (reuters.com). As indicated in the graph below, this largest living generation is more entrepreneurial and impulsive and redefines the standards that bridge the previous generations. Born between 1981-1995, the oldest millennial demographic now 37 years old, prefers a work-life balance, and spends more money on the best entertainment and experiences and the most famous and trendy items than those born prior to 1980. According to Bain & Company, 59% of the 3,004 surveyed Chinese millennials in 2017 expect an increase in their salary in the upcoming 5-year period; while only 8 percent of this generation believe their income to stay approximately the same. These figures indicate an elevated consumption level of 20-30 percent of monthly salary to be spent on 2-3 designer fashion items per year.

   This statistic shows the share of total consumption by the Millennials versus the old generation in China by 2021. According to the source, the share of total consumption by the young generation is projected to reach 69 percent by 2021, versus 31 percent by the older generations.

   For many, price is less important than the perceived value. According to Rein, "Chinese consumer behaviour means they shop both at the top and the bottom of the spending scale. Anything that's not great value--it doesn't give them prestige, it doesn't give them status, it's not an aspiration--is something that Chinese don't want unless it's dirt cheap. So, they'll go out and buy very expensive lipstick, but they'll buy the cheapest garbage bags because they don't want to spend money on garbage bags."

   As the base of wealthy Chinese clients spreads internationally, an evolution in attitudes, interests, and brand perceptions are also changing. Companies need to be less myopic and rethink the integrated communication links to attract this target market by engaging and appealing to the source of value. There is a shift in the 'top-down' relationship or 'push strategy' which has existed for centuries with luxury brands, to a 'bottom-up' affiliation or 'pull strategy' where the client has become as important as the product (Okonkwo, 2009). As reported by BrandZ, the youth grew up in a much more affluent and brand-conscious China than their parents, are more transparent in their desires, and have more discretionary income to spend on big brand name items.

   The new driving force in this rapidly increasing luxury arena is China's one child policy which has played an important role in perpetuating this luxury market by allowing parents to give more money to their only offspring. These millennials express their taste by purchasing a range of luxury brands such as Cartier, Channel, Christian Dior, Prada, Versace, and Yves Saint Laurent. These global companies are only a sampling of those flocking to China's secondary cities for shoppers' convenience.

2. TECHNOLOGY AND TOURISM THRIVE

   These sophisticated leisure tourists account for 70% of second generation Chinese who have family money to spend while often accompanied by 3-4 people and frequent countries such as France (a favorite location by 40% of the respondents), Japan, Australia, New Zealand, and the United States respectively.

   Another country frequently visited is the shopping mecca of Bicester, England where passengers arriving at the...