[PPT] - 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 PowerPoint Presentation

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February 2016

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

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I N T R O D U C I N G A G I L I T Y

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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

f 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.

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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 ™

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Fielded in December 2015
Covers a total of 14 APAC markets - A total of 2,402 respondents
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

Countries Sample Size (n)

China 454 Hong Kong 147 Japan 114 Korea 154 India 414 Singapore 161

Research Methodology

Thailand 227 Malaysia 129 Taiwan 114 Philippines 164 Indonesia 103 Vietnam 221

*Respondents who indicate going to websites of clothing and accessory retailers for premium and luxury goods.

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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

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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

ptimistic and come in at the same level as Singaporeans

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% 8% 2% 13% 3% 4% 6% 3% 6% 5% 4% 0% 25% 16% 10% 16% 17% 17% 12% 11% 10% 5% 8% 4% 48% 38% 52% 50% 36% 39% 43% 30% 41% 26% 32% 21% 16% 33% 31% 14% 37% 30% 29% 46% 31% 48% 36% 51% 3% 5% 5% 7% 8% 9% 10% 11% 13% 16% 19% 24%

KOREA MALAYSIA HONG KONG JAPAN TAIWAN SINGAPORE PHILIPPINES THAILAND INDONESIA VIETNAM INDIA CHINA

WILL HAVE MORE DISPOSABLE INCOME

Do not agree at all Somewhat disagree Neutral Somewhat agree Completely agree

HONG KONG CHINA

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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.

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 11% 9% 15% 5% 19% 17% 16% 12% 9% 7% 5% 6% 26% 15% 26% 21% 32% 27% 29% 14% 26% 15% 10% 11% 37% 54% 40% 54% 31% 38% 37% 41% 39% 35% 31% 29% 23% 19% 16% 16% 13% 14% 13% 26% 17% 34% 37% 35% 3% 4% 4% 4% 5% 5% 5% 8% 8% 9% 17% 20%

TAIWAN JAPAN MALAYSIA HONG KONG KOREA INDONESIA PHILIPPINES THAILAND SINGAPORE VIETNAM CHINA INDIA

WILL SPEND MORE ON LUXURY ITEMS

Do not agree at all Somewhat disagree Neutral Somewhat agree Completely agree

HONG KONG CHINA

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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.

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% 10% 2% 1% 5% 3% 5% 3% 0% 4% 4% 0% 16% 7% 9% 7% 12% 11% 7% 8% 12% 6% 6% 2% 39% 50% 39% 45% 31% 32% 34% 26% 21% 30% 23% 16% 29% 25% 42% 37% 42% 38% 37% 44% 47% 41% 41% 50% 9% 9% 9% 10% 10% 16% 18% 19% 19% 19% 26% 32%

MALAYSIA JAPAN TAIWAN HONG KONG KOREA SINGAPORE PHILIPPINES VIETNAM THAILAND INDONESIA INDIA CHINA

WILL DO MORE LEISURE TRAVELS

Do not agree at all Somewhat disagree Neutral Somewhat agree Completely agree

HONG KONG CHINA

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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.

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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 ?

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What do Chinese consumers expect from luxury?

Quality is clearly the most important expectation from luxury brands for the Chinese consumer.

Source: Agility Affluent Insights 2015. Q: Please rate how strongly you agree with each of the following statements – top-2. Base: China, n=454 48% 59% 62% 65% 66% 80% I use luxury brands because people I look up to use them It is important for me that the luxury brand I use is socially responsible It is important to me that people recognize the brand I am using I use luxury brands because of their exclusivity I use luxury brands because they are unique from

ther mainstream brands

I use luxury brands because of the higher quality they provide

China

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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.

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 27% 27% 32% 42% 44% 59% I use luxury brands because people I look up to use them I use luxury brands because of their exclusivity It is important to me that people recognize the brand I am using It is important for me that the luxury brand I use is socially responsible I use luxury brands because they are unique from

ther mainstream brands

I use luxury brands because of the higher quality they provide

Hong Kong

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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
ften overlooked the local consumer in favour of the mainland Chinese.

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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 ?

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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.

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 68% 52% 66% 58% 77% 69% 59% 58% 63% 66% 52% 63% 56% 46% 32% 38% 62% 45% 53% 42% 39% 43% 45% 50% China Hong Kong Japan Korea India Singapore Thailand Malaysia Taiwan Philippines Indonesia Vietnam

How Luxury is Researched

Research luxury online Research luxury on mobile phone

HONG KONG CHINA

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52% 25% 48% 25% 70% 32% 41% 37% 35% 37% 43% 45% 44% 22% 19% 6% 53% 27% 39% 23% 19% 21% 23% 38% China Hong Kong Japan Korea India Singapore Thailand Malaysia Taiwan Philippines Indonesia Vietnam

How Luxury is Bought

Purchase luxury online Purchase luxury products on mobile phone 17

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.

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

HONG KONG CHINA

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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.

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

32% 37% 43% 44% 45% 45% 46% 47% 48% 48% 50% 63% Japan Indonesia Malaysia Thailand Taiwan Korea Philippines China India Hong Kong Vietnam Singapore

Preferring to Buy Luxury in Store

Prefer to purchase luxury products in store rather than online HONG KONG CHINA

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What is the role of buying luxury when traveling?

1 in 2 Chinese, Singaporean and Indian consumers mainly buy luxury when travelling, and more than 1 in 3 do so in most markets, including HK.

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

25% 30% 33% 33% 34% 37% 38% 39% 40% 48% 50% 51% Korea Japan Indonesia Malaysia Philippines Taiwan Hong Kong Vietnam Thailand India Singapore China

Buying Luxury Mainly When Traveling

Mainly buy luxury brands when travelling HONG KONG CHINA

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What are the top websites for luxury fashion?

Top sites for luxury fashion vary by market. However, the most popular across the region appear to be Amazon, Lazada and Zalora. Tmall and Taobao are leaders in China and HK, respectively.

Source: Agility Affluent Insights 2015. Q: What is your favourite website to browse for luxury or high-end clothing and accessories? – top-2. Base: All respondents, n=2,402

Thailand Malaysia Taiwan Philippines Indonesia Vietnam Top 1 Lazada Zalora Yahoo Zalora Lazada Lazada Top 2 Facebook Lazada Momo Lazada Zalora Zalora Top 3 Zalora eBay Tmall Amazon Tokopedia Amazon CHINA HK Japan Korea India Singapore Top 1 Tmall Taobao Rakuten Lotte Flipkart Reebonz Top 2 Vipshop Amazon Amazon Shinsegae Amazon Zalora Top 3 Amazon Zalora Zozo Naver Jabong Lazada

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Wrap-Up: How is luxury bought?

India and China are front runners in terms of researching and buying

luxury online and using mobile phones.

Vietnam and Thailand have been quick to adopt online into luxury

purchasing, but they are especially ahead of most markets in terms of using mobile phones to both research and purchase luxury products.

Buying luxury in stores rather than online is still preferred by almost half in

HK and China.

There is a large proportion of consumers who prefer to buy luxury only

when they travel, especially in China, Singapore and India.

There are a number of regional websites that are popular for browsing

luxury products, but local brands are popular in individual markets.

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W H E R E D O T H E Y L E A R N A B O U T L U X U R Y P R O D U C T S ?

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Where specifically do you reach them?

Beyond broader categories, specific media choices vary greatly by market:

Source: Agility Affluent Insights 2015. Q: In which of the following places, venues, or media do you look for or pay attention to information or advertising of luxury products and services. Base: All respondents, n=2,402 China HK Japan Korea Taiwan India

Social Media NET

55% 65% 36% 42% 67% 76%

Shopping malls

57% 27% 38% 50% 56% 52%

Online search

31% 38% 35% 58% 39% 49%

Brand Website

54% 38% 44% 31% 54% 44%

Television

37% 20% 24% 39% 32% 40%

Recommendation from friends/family

27% 25% 22% 35% 25% 31%

Website ads

35% 19% 24% 21% 31% 26%

Online video

31% 27% 13% 18% 30% 31%

Magazines (printed)

25% 27% 26% 21% 22% 33%

Celebrity Endorsement

35% 22% 9% 19% 27% 25%

Newspaper (printed)

13% 22% 16% 13% 10% 45%

Write-ups on blogs/forums/review sites

24% 16% 12% 34% 20% 15%

Outdoor advertising

29% 20% 14% 14% 23% 22%

Articles/stories in print/websites/ TV

21% 25% 19% 18% 25% 20%

Airport

31% 8% 6% 15% 20% 26%

Mobile apps

17% 8% 6% 19% 12% 34%

Emailed subscriptions

13% 16% 25% 26% 13% 22%

Websites specific to the category

19% 9% 16% 13% 14% 24%

Placement of a brand in movie?/TV

24% 11% 8% 16% 8% 26%

Sponsorship Event

22% 16% 10% 5% 15% 16%

Cinema advertising

20% 10% 8% 12% 11% 23%

Leaflets in magazines/newspapers

9% 22% 13% 18% 11% 20%

What are the top social media sources for luxury?

Social media space is also fragmented.

Source: Agility Affluent Insights 2015. Q: In which of the following places, venues, or media do you look for or pay attention to information or advertising of luxury products and services. Base: All respondents, n=2,402 China Hong Kong Japan Korea Taiwan India Facebook

16% 59% 19% 21% 59% 62%

Google+

17% 14% 10% 20% 15% 36%

Instagram

5% 24% 9% 18% 12% 21%

Twitter

12% 10% 23% 11% 3% 31%

Sina Weibo

42% 6% 0% 1% 3% 3%

5% 3% 1% 2% 6% 24%

4% 3% 1% 3% 5% 13%

Tumblr

4% 4% 2% 3% 2% 6%

Qzone

11% 6% 0% 0% 3% 4%

2% 3% 3% 1% 1% 5%

Pengyou

4% 3% 0% 1% 6% 3%

Renren

5% 4% 1% 1% 2% 2%

Mixi

2% 3% 2% 1% 2% 3%

Other social media

10% 4% 3% 8% 8% 12%

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Wrap-Up: How do you reach them?

Online media has overtaken traditional media as a source of information

for luxury in most markets in the region.

Social media is almost at par with other online and traditional media as a

platform for luxury brands to reach consumers.

Shopping malls are an important place to learn about luxury for the

Chinese, while Honkongers are influenced strongly on social media,

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L U X U R Y C O N S U M E R S E G M E N T S

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How do I connect with luxury consumers?

We have identified four distinct Asian luxury consumer segments based

n their behaviour and psychographic attitudes in relation to purchasing

luxury products from different categories.

The Exclusivity Seeker The Indulgent Traveler The Virtual Shopper The Luxury Bargain Hunter

“Exclusivity is a luxury

nly a premium brand

can deliver.” A key segment for many high-end brands as they have considerable disposable income and spend liberally across multiple luxury categories. “Luxury products I buy

n my travels elevate

my social status.” Buys luxury predominantly at airports or destination

cities. Spends on high-

end accessories such as premium/ luxury watches and jewellery. “Online luxury does not phase me; I research and buy on the web.” Does not have an issue with luxury converging with the virtual world. Values luxury goods for their higher quality and uniqueness. “Luxury is great, but

nly at the right price”

Prefers to buy products tax free. Least spending power

ut of all the

segments, but spends more than others on electronic gadgets and on their car.

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What segments are prominent in each market?

China has relatively many ‘exclusivity seekers’, while HK has a lack of ‘virtual citizens’. Indonesia has the highest proportions of ‘luxury bargain hunters’. Japan and India have the most ‘virtual citizens’, while you will find the most ‘exclusivity seekers’ in Thailand and ‘travel indulgers’ in Japan.

Source: Agility Affluent Insights 2015. Base: All respondents, n=2,402 14% 10% 4% 7% 3% 10% 12% 18% 6% 3% 7% 8% 14% 37% 42% 49% 41% 44% 37% 30% 46% 26% 44% 34% 27% 34% 24% 14% 34% 16% 18% 33% 22% 18% 29% 18% 22% 20% 25% 25% 35% 13% 36% 35% 20% 35% 18% 38% 35% 37% 45% 26%

CHINA HONG KONG JAPAN KOREA TAIWAN INDIA SINGAPORE THAILAND MALAYSIA TAIWAN PHILIPPINES INDONESIA VIETNAM

Exclusivity Seeker Travel Indulger Virtual Citizen Luxury Bargain Hunter

HONG KONG CHINA

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W H A T D O E S T H I S M E A N F O R M E I N 2 0 1 6 ?

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What does this mean going into 2016?

Consumers will likely travel more in all markets and expect to have more

money to spend in most markets, but expansion of luxury is concentrated in China and India, with Vietnam and Thailand also deserving attention, and HK remaining stagnant.

Luxury brands need to attract and be ready to cater to tourist shoppers

coming from multiple source markets.

Marketers need to harness the full potential of mobile platforms to engage

with consumers and drive sales, especially in markets like China.

Retail stores are here to stay, a brand’s online and mobile offering must

converge with and support its brick and mortar presence.

Online seems to be gaining popularity over traditional media for luxury

brands in most markets.

Social media is a key communication channel. When building a social

media presence a single platform approach does not cut it.

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We look forward to working with you!

SINGAPORE 300 Beach Road, #14-07, The Concourse Singapore 199555 Amrita Banta - Managing Director amrita@agility-research.com +65 6298 8813 Ali Mirza –CEO ali@affluential.com +852 92425451

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