I n s i g h t s i n t o t h e L u x u r y C o n s u m e r i n 2 0 1 6 - T r e n d s t o W a t c h A F o c u s o n M a i n l a n d C h i n a a n d H o n g K o n g February 2016
I N T R O D U C I N G A G I L I T Y 2
Introducing Agility Research & Strategy Wh o i s A g i l i t y ? Agility Research & Strategy is Asia’s fastest growing research company, ranked Globally as a Top 10 research firm in the Luxury and Premium brand research space. As Agency of the Year nominee and with over 30 years combined experience in understanding the Affluent consumer, we are truly Fluent on the Affluent™ . We partner with leading brands to provide actionable insights through a suite of data, research and intelligence solutions to boost their market share. 3
L O O K I N G A T T H E L U X U R Y C O N S U M E R I N 2 0 1 6 - T R E N D S T O W A T C H F I N D I N G S F R O M A G I L I T Y A F F L U E N T I N S I G H T S ™ 4
Research Methodology Fielded in December 2015 • Covers a total of 14 APAC markets - A total of 2,402 respondents • Countries Sample Size (n) Thailand 227 China 454 Malaysia 129 Hong Kong 147 Japan 114 Taiwan 114 Korea 154 Philippines 164 India 414 Indonesia 103 Singapore 161 Vietnam 221 For this presentation we are looking at luxury consumers* among the • general online population across these markets, with a focus on China and Hong Kong *Respondents who indicate going to websites of clothing and accessory retailers for premium and luxury goods. 5
F U T U R E O U T L O O K F O R L U X U R Y C O N S U M E R S 6
Will consumers have Money to Spend in 2016? Chinese consumers, followed by Indian and Vietnamese, are most optimistic about having more money to spend in 2016, compared to 2015. HK consumers are not as optimistic and come in at the same level as Singaporeans WILL HAVE MORE DISPOSABLE INCOME Do not agree at all Somewhat disagree Neutral Somewhat agree Completely agree CHINA CHINA 0% 4% 21% 51% 24% INDIA 4% 8% 32% 36% 19% VIETNAM 5% 5% 26% 48% 16% INDONESIA 6% 10% 41% 31% 13% THAILAND 3% 11% 30% 46% 11% 6% 12% 43% 29% 10% PHILIPPINES 4% 17% 39% 30% 9% SINGAPORE 3% 17% 36% 37% 8% TAIWAN 13% 16% 50% 14% 7% JAPAN HONG KONG 2% 10% 52% 31% 5% HONG KONG 8% 16% 38% 33% 5% MALAYSIA KOREA 7% 25% 48% 16% 3% Source: Agility Affluent Insights 2015. Q: Looking ahead to 2016, and comparing it to 2015, please rate how strongly you agree with each of the following statements Base: All respondents, n=2,402 7
What is the outlook for Luxury Spending? Consumers in India and China are most likely to increase luxury spending. Vietnam and Thailand are also upbeat. In HK they are not likely to spend more. WILL SPEND MORE ON LUXURY ITEMS Do not agree at all Somewhat disagree Neutral Somewhat agree Completely agree INDIA 6% 11% 29% 35% 20% CHINA CHINA 5% 10% 31% 37% 17% VIETNAM 7% 15% 35% 34% 9% SINGAPORE 9% 26% 39% 17% 8% THAILAND 12% 14% 41% 26% 8% PHILIPPINES 16% 29% 37% 13% 5% INDONESIA 17% 27% 38% 14% 5% KOREA 19% 32% 31% 13% 5% HONG KONG HONG KONG 5% 21% 54% 16% 4% MALAYSIA 15% 26% 40% 16% 4% JAPAN 9% 15% 54% 19% 4% TAIWAN 11% 26% 37% 23% 3% Source: Agility Affluent Insights 2015. Q: Looking ahead to 2016, and comparing it to 2015, please rate how strongly you agree with each of the following statements Base: All respondents, n=2,402 8
Will luxury consumers continue to travel in 2016? The majority are looking to increase the amount of leisure travel in 2016, with the exception of Japan and Malaysia, and also HK. Few in any market expect to travel less, with China showing the biggest potential for growth. WILL DO MORE LEISURE TRAVELS Do not agree at all Somewhat disagree Neutral Somewhat agree Completely agree CHINA CHINA 0% 2% 16% 50% 32% INDIA 4% 6% 23% 41% 26% 4% 6% 30% 41% 19% INDONESIA THAILAND 0% 12% 21% 47% 19% VIETNAM 3% 8% 26% 44% 19% PHILIPPINES 5% 7% 34% 37% 18% 3% 11% 32% 38% 16% SINGAPORE KOREA 5% 12% 31% 42% 10% HONG KONG HONG KONG 1% 7% 45% 37% 10% 2% 9% 39% 42% 9% TAIWAN JAPAN 10% 7% 50% 25% 9% MALAYSIA 9% 16% 39% 29% 9% Source: Agility Affluent Insights 2015. Q: Looking ahead to 2016, and comparing it to 2015, please rate how strongly you agree with each of the following statements Base: All respondents, n=2,402 9
Wrap-Up: Future Outlook for Luxury Consumers • Asian luxury consumers expect to have more disposable income, with the exception of Japan and Korea, where there are many who are much more cautious. • Luxury spending is growing fast in China and India, but also in Vietnam and Thailand. HK luxury spending growth prospects remain stagnant. • We can expect leisure travel to continue growing at a fast pace across most of Asia, and especially from consumers in China and India. 10
H O W D O C O N S U M E R S P E R C E I V E L U X U R Y ? 11
What do Chinese consumers expect from luxury? Quality is clearly the most important expectation from luxury brands for the Chinese consumer. China I use luxury brands because of the higher quality 80% they provide I use luxury brands because they are unique from 66% other mainstream brands I use luxury brands because of their exclusivity 65% It is important to me that people recognize the 62% brand I am using It is important for me that the luxury brand I use is 59% socially responsible I use luxury brands because people I look up to 48% use them Source: Agility Affluent Insights 2015. Q: Please rate how strongly you agree with each of the following statements – top-2. Base: China, n=454 12
How do Hongkongers view luxury? Similar to the Chinese, quality is the most important expectation from luxury brands in Hong Kong. Luxury brands are also expected to be unique and socially responsible. Unlike in China, exclusivity is not that important. Hong Kong I use luxury brands because of the higher quality they 59% provide I use luxury brands because they are unique from 44% other mainstream brands It is important for me that the luxury brand I use is 42% socially responsible It is important to me that people recognize the brand 32% I am using I use luxury brands because of their exclusivity 27% I use luxury brands because people I look up to use 27% them Source: Agility Affluent Insights 2015. Q: Please rate how strongly you agree with each of the following statements – top-2. Base: Hong Kong, n=147 13
Wrap-Up: What motivates luxury consumption? • In greater China (PRC, Taiwan, HK) consumers appear highly practical in their consumption habits and are driven to buy luxury primarily because of quality. • It is important for luxury brands to be socially responsible in Hong Kong. • A focus on the HK domestic consumer is key in order for brands who have often overlooked the local consumer in favour of the mainland Chinese. 14
H O W D O T H E S E C O N S U M E R S B U Y L U X U R Y ? 15
What is the role of online and mobile for luxury research? Researching luxury online and on mobile phones is particularly popular in India and China. Singaporeans are likely to also go online, while Honkongers are one of the slowest adopters of online luxury research. Consumers from Vietnam and Thailand are likely to research on their phones. How Luxury is Researched 68% CHINA China 56% 52% HONG KONG Hong Kong 46% 66% Japan 32% 58% Korea 38% 77% India 62% 69% Singapore 45% 59% Thailand 53% 58% Malaysia 42% 63% Taiwan 39% 66% Philippines 43% 52% Indonesia 45% 63% Vietnam 50% Research luxury online Research luxury on mobile phone Source: Agility Affluent Insights 2015. Q: Please rate how strongly you agree with each of the following statements – top-2. Base: All respondents, n=2,402 16
What is the role of online and mobile for buying luxury? India, followed by China and Japan are leading markets in terms of purchasing luxury online. Thailand and Vietnam are following India and China in buying luxury on mobiles. HK is also a laggard in online purchases. How Luxury is Bought 52% CHINA China 44% 25% HONG KONG Hong Kong 22% 48% Japan 19% 25% Korea 6% 70% India 53% 32% Singapore 27% 41% Thailand 39% 37% Malaysia 23% 35% Taiwan 19% 37% Philippines 21% 43% Indonesia 23% 45% Vietnam 38% Purchase luxury online Purchase luxury products on mobile phone Source: Agility Affluent Insights 2015. Q: Please rate how strongly you agree with each of the following statements – top-2. Base: All respondents, n=2,402 17
Is a physical store still needed? Singaporeans show a very high preference to purchase luxury in store rather than online. Also, roughly half indicate the same sentiment in Vietnam, Hong Kong, India, and China. Preferring to Buy Luxury in Store Singapore 63% Vietnam 50% Hong Kong 48% HONG KONG India 48% CHINA China 47% Philippines 46% Korea 45% Taiwan 45% Thailand 44% Malaysia 43% Indonesia 37% Japan 32% Prefer to purchase luxury products in store rather than online Source: Agility Affluent Insights 2015. Q: Please rate how strongly you agree with each of the following statements – top-2. Base: All respondents, n=2,402 18
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