By a considerable distance, the USA and China are the two most important markets for the luxury industry. The two countries HNWIs are the determining factor in how the luxury industry will perform. We look at Agility’s latest research to uncover whether both countries millionaires are more likely or less likely to spend over the next 12 months.
Although both China and USA’s millionaires share a passion for luxury, the HNWIs opinions and outlooks in both countries are sometimes as different as they are similar. One heartening factor influencing the attitudes of the two superpowers wealthy is their direct and individual impact on the environment.
Both US and Chinese millionaires are now far more open to looking into second-hand luxury goods rather than buying newly manufactured products. There is also a growing trend towards buying repurposed goods and those that are made in a wholly sustainable way. In our opinion, this is a welcome and positive step in the right direction and we predict that this will be a vital trend that the luxury industry will need to adopt during the next decade.
For this feature, we look at the newly released data from Agility’s signature studies TrendLens™ China and TrendLens™ USA to understand how optimistic the two country’s millionaires are and whether there is anything in the pipeline that might cause concern for the luxury industry.
A shared Optimism
Overall, American Millionaires have more optimism for the next 12 months when compared to earlier this year. With rising disposable incomes, more so than pre-Covid, American millionaires expect to spend more on luxury products and experiences over the next year.
China’s millionaires are also experiencing the same trends with rising income and wealth, investments, resulting in an optimistic outlook when it comes to spending. However, both countries’ millionaires do share some concerns. More than half of USA millionaires are very concerned about their children’s future and family health. Chinese Millionaires have similar worries: family’s health, individual health and children’s future seem to be the top priorities for them.
Ready to Spend Again
US Millionaires are much more likely to ramp up their spending on all luxury categories in the next six months, especially on experiences such as travel, spas, and fine dining. It shows how the past 18 months of Covid have deprived them of the freedom and joy of experiencing their life to the fullest.
On the other hand, Chinese Millionaires are more likely to increase their spending on luxury goods such as fashion, clothing & handbags, jewellery, watches and luxury cars. The products they used to buy when travelling overseas and have been precluded by the Covid travel constraints.
Vintage Luxury vs Gifting
US Millionaires are keen to purchase second-hand luxury products, especially when they are vintage luxury products. This behaviour might seem unusual, as they have enough disposable income to purchase most goods new. However, there is a straightforward reason for this: they are becoming more concerned about sustainability. Buying vintage products may not be about the savings but rather about contributing to helping health the planet.
For Chinese Millionaires, gifting continues to play a significant role in luxury buying, with 80% of millionaires buying luxury items as gifts. Among all luxury categories, alcohol is the strongest gifting category, making China one of the most promising and competitive markets for premium spirits & wines brands.
Shopping Experience
US Millionaires continue to be avid in-store shoppers, as they enjoy the experience, though the gap versus online is narrowing. Luxury brands that are performing better are those that can bridge the online and offline worlds seamlessly, offering convenience without compromising on the luxury experience.
Interestingly, despite all the hype about key opinion leaders (KOL) influence, Chinese Millionaires prefer official brand information over the people they follow on social media when researching a luxury brand or purchase. It is a reminder of how important it is for brands in China is not to rely only on influencer marketing but instead invest in their own brand to have a solid and authoritative single voice.
Read our article on the change in China’s wealthy consumers’ attitudes here.
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