Master Card: Chinese Millennials to Spend Nearly Double on Luxury Goods

(IDEX Online News) – A recent survey from MasterCard has revealed that millennials (18-29 years old) in China are the biggest purchasers of luxury goods in Asia Pacific. This demographic plans to spend close to double the Asia Pacific average on luxury goods, including jewelry, in the next year.

Some 17 percent say they will spend on jewelry. A similar number intended to buy designer clothes and leather goods. However, the most popular category of luxury items are high-end tech gadgets, with 25 percent of millennials in Asia Pacific planning to buy items such as smart phones or tablet computers.

Millennials from China intend to spend $4,362 on luxury goods over the next year, nearly double that of the Asia Pacific average of $2,584. South Korea ($2,638) and Hong Kong ($2,584) round off the top three.

Overall, the majority of millennials in the region will take under a month to research and consider a luxury item before buying it (44%), led by those in India (64%), China (51%), South Korea (48%) and Taiwan (48%).

Thai (60 percent) and Indonesian (50%) millennials are the most impulsive shoppers in the region with at least half buying luxury goods on impulse, above the regional average of 26 percent.

The most careful millennial shoppers are from Vietnam – the majority will only buy a luxury item after two to six months of extensive research (45%), more than the regional average of 20 percent.

For foreign brands looking to break into this lucrative market, more than a third of millennials in the region prefer Western brands over regional or local goods. This is especially true of millennials in China (66%), Vietnam (60%), South Korea (59%) and Hong Kong (52%). Millennial consumers in India (50%) and Indonesia (61%, however, would rather buy local brands.

The majority of millennials still prefer purchasing from local stores (64 percent), rather than local e-commerce sites (9 percent). A fifth prefer to buy luxury items in-store when travelling overseas, this is especially true of Chinese millennials, 51 percent of whom are most likely to buy a luxury item in-store while travelling.

“A quarter of millennials in Asia Pacific plan to spend significant sums on the latest technology such as smartphones and tablets over the next year,” said Eric Schneider, region head, Asia Pacific, MasterCard Advisors.

“This reflects a shift in priorities away from designer clothes and jewelry and towards communications technology. Yet, an increased desire for technology and the ability to get online has not led to a dramatic shift in purchasing from in-store to e-commerce. The vast majority of young people still prefer to browse in-store, perhaps as a result of consumers’ somewhat misplaced concern with online security, theft and fraud, particularly when making bigger purchases. Meanwhile, the majority of Chinese millennials prefer to buy luxury goods in-store while travelling, this reflects not only a preference for Western brands but also value for money, as lower prices abroad are a major pull factor.”