Retail in Asia


On the search for niche luxury among Chinese consumers

How would you feel about a brand who categorised you as part of a generic group with 1.4 billion others? You probably wouldn’t be rushing out to buy their wares. The same applies for the average Chinese consumer who, over the past generation, has become largely intolerant of marketing, products and services that don’t connect with their individual needs and desires.

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This has seen personalisation and customisation become some of the most effective tools to resonate with discerning Chinese consumers. At a broader level, it has driven a proliferation of products targeting specific demographics and tribes in China. There are significantly more SKUs in virtually every category in China than in other markets.

A good example of broader SKU ranges can be drawn from the consumption patterns of a parent, gym goer or elderly – Chinese consumers are more likely to buy specific dairy products for their needs, rather than generic plain white milk supposedly suitable for everyone.

A trend that goes hand-in-hand with more targeted products and marketing, is the rise of niche interests in China. As Chinese consumers have become more educated, worldly and affluent, their interests have also widened. Status in China used to often be measured by having a recognisable Louis Vuitton handbag. Not so much any more. Over the past year, mainland Chinese consumers have become 34 percent more likely to show interest in niche luxury brands that fewer people know about, but that offer great style and quality, according to one study. The same applies to hobbies, which has seen an explosion in popularity for everything from baking to niche sports.

Source: Schiaparelli

Niche interests are particularly prevalent with younger Chinese. Although they get street credit by being unique, they are still very much part of a community. For China’s many only-children, such communities can provide de facto siblings, often sharing a common set of ideals. This isn’t just important for other community members, but also brands hoping to tap into those niches.

What’s unique about China, is how large these ‘niches’ can be – tens or even hundreds of millions of fans – and also how quickly they can become the next all-consuming craze. When Chinese consumers get into something, they can become obsessive, from its idol culture, to its gamers, and more recently, its cyclists.

Skateboarding, and its subset, surfskating, is a recent example of a niche that pushed a button with Chinese consumers. Over the past few months, Chinese social media feeds have become inundated with videos and photos of the craze. Sales of boards and paraphernalia have shot up, as have brands hoping to resonate with consumers by capitalising on the trend, such as Nespresso’s collaboration with DBH skateboards.

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The rise of niches in China is good news for brands targeting Chinese consumers. It provides a broader range of options for brands to be smarter and more targeted to reach and resonate with Chinese consumers. It also provides opportunities for smaller brands who can carve out a niche with a relevant subsegment of consumers. Contact China Skinny to learn how we can assist you to best tap into the opportunities.

(Source: China Skinny)