Together, Chinese millennials and Indian millennials account for a whopping 47 percent of the global millennial population– here’s how they’re affecting the future of the luxury sector.

China has been a top-priority market for luxury brands for many years. Chinese consumers account for a third of global luxury spending, and this is expected to increase by as much as 40 percent by the middle of the next decade.

While there are concerns of a slowdown in demand impacting the luxury market in 2019, you will not hear this view in recent interviews with affluent Chinese consumers, who remain bullish overall about their own spending in the next year.

India’s luxury sector, on the other hand, was estimated to be a significant US$30 Billion in 2018, and has been growing double digits.

Based on the latest Affluent Insights study, the appetite of affluent Indian consumers for luxury is likely to only increase – they are eager to spend more on luxury items, upgrade to more expensive brands, and to spend on travel. In fact, India is starting to show the same behaviour towards luxury purchase that the Chinese affluent consumer had years ago.

World’s Most Powerful Consumers

The combination of Chinese millennials (415 million) and Indian millennials (440 million) equate to 47% of the global millennial population. Touted as “the world’s most powerful consumers” by the Financial Times, millennials have been estimated to account for the lion’s share in sales for top luxury brands, making up to 50% of Gucci’s & 65% of Yves Saint Laurent’s sales.

While the overall infrastructure in China is significantly ahead India in terms of supply chains and road, railway and air transportation, enabling the growth of the luxury market, India is keen to develop these as well, with major improvements to airports and recent purchasing of highspeed trains from Japan. Once infrastructure is in place in India, the luxury market will be propelled domestically.

With China a mature market for luxury and India an evolving one, we take a look at the affluent consumer in each of these markets.

Opposing Values

The beliefs, attitudes and values affluent Indians and Chinese hold towards luxury differ. On one hand, affluent Indians equate luxury with quality of life – being free from financial worries and having the spending power to afford a lavish lifestyle is what defines luxury for them. On the other hand, the affluent Chinese associate luxury more with high quality and high-end products and services. Even though they define ‘luxury’ as expensive, they also define it as something to be enjoyed.

While affluent consumers in both markets are price-conscious and expect brands to provide good value for money, affluent Indians purchase luxury goods for social gratification, with nearly 4 in 5 expecting brands to be recognizable enough to elevate their social status. For the affluent Chinese, the social value of luxury goods is slowly decreasing year on year.

Thus, their expectations for interacting with luxury brands differ. Affluent Indians want it all: customized experiences, invitations to exclusive events, loyalty programs or membership. By contrast, affluent Chinese prioritise exclusivity, quality service and customizable products and services.

While both affluent Indian and Chinese consumers are looking to increase spending the most in terms of travel experiences and activities, affluent Indians are also looking to spend more on hotels, accommodation and airline tickets.

SOURCE: Agility’s Affluent Insights™ 2019 Travel Report

In terms of travel activities, affluent Indians are primarily interested in typical leisure activities including sightseeing, shopping, and beach. Meanwhile, affluent Chinese consumers are interested in a wider variety of activities, from city tours to food and cultural activities. Many are also interested in outdoor physical activities such as mountaineering and bungee jumping.

Sixty one percent of affluent Indians prefer luxury items designed by local designers as compared to any other market in the region, though China comes second at 50%. Last year, driven by the understanding that there is a market fueled by the growing number of younger shoppers who are willing to spend, Italian label Zegna took to partnering with a local luxury brand in India.

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At AFFLUENTIAL™, our vision is to be the World’s leading authority for data, insights and consulting on the Affluent consumer.

These “Influential and Affluent” consumers have distinct consumer journeys when it comes to decision making on the brands and products they purchase. Whether it be purchasing a can of soft drink or a luxury car, the Affluent consumer has varying demographics, behaviours and preferences by market. Brands that want to capture this lucrative segment need in depth data customized to their specific offering.

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