Economic confidence
All the interviewees believe that the use of luxury items can reflect one's financial and social status. "If a person can afford lots of luxurious products, that person's financial condition is not likely to be too bad," Zhang said.
So what are the major factors that contribute to the younger generation's desire to purchase luxury products?
Wang from OC&C told the Global Times that this desire is driven by millennials having higher economic confidence than their actual income.
"They in general have a willingness to spend [across all categories, on products and services] and a low propensity to save. They are willing to buy luxury products even if they can't really afford it," she said.
She also explained the notable behavioral changes of post-90s generation Chinese consumers' shopping habits for luxury items compared with their post-70s and post-80s generation counterparts.
One difference, according to Wang, is that Chinese millennial consumers are more digital savvy than seniors.
"Their luxury purchases are influenced heavily by online interactions all the way from getting to know the brand, browsing the products and researching prices to shopping and then sharing their commentaries," she said.
Can't fool us!
Apart from digital proficiency, millennial preferences are more individualistic than previous generations, opting to buy products that reflect their own personality and style, according to Veronica Wang.
Huang, for instance, said her purchasing decisions are not affected by social media, celebrities or friends. "I buy a luxury item based on my own preference and need," she said.
In contrast, Zhang said he prefers to buy only the hottest designs or bestsellers, as he wants to gain recognition from others. "I hope people around me will recognize my choices, so I tend to buy the most popular designs," he said.
Zhang admitted that wearing luxurious clothing makes him feel better about himself. "To be honest, wearing high-end brands makes me feel more confident and have a feeling that 'I am rich,'" he said.
Veronica Wang also pointed out that Chinese millennials generally have more overseas travel experience and broader horizons than their older countrymen, and therefore tend to buy luxury products where the most "value for money" options are.
"[They] usually [buy] in a brands' home market, such as France, the UK and Italy," Wang said. "But these brands can no longer fool Chinese consumers, especially the post-90 generation, with excessively high prices in China boutiques."
Professional buyers
Many of our interviewees told the Global Times that they prefer to buy luxury products through professional buyers, which are widely known as daigou in Chinese, or via e-commerce platforms.
Zhang said that after he finds all the new products he wants to buy, he just asks Chinese friends abroad or daigou buyers to find these products for him.
As for Wang Chenchen, she prefers to wait until she is traveling abroad, or just buy on foreign shopping websites. So what strategies can all these luxury brands adopt to attract a younger generation of Chinese consumers?
Veronica Wang pointed out that they should fully leverage their online presence not only as a sales channel but also a marketing method to engage and interact with younger consumers.
"Given the power of Key Opinion Leaders [KOLs], luxury brands need to work hard to identify and hire the right KOLs to influence and inspire the younger consumers," she said.
She added that brands also need to develop a unique image. "Younger generations are not looking for broadly accepted symbols of social status. They are pursuing ways to express their individuality," she said.
"To attract younger consumers, luxury brands need to truly understand the needs and preferences of their target customers and deliver something [a product and brand proposition] that can reflect their values."
