By Marco Passoni
There can be no doubt that China’s stranglehold on being the dominant player in both the luxury and travel retail sectors has been broken. Last week’s report by the Hurun Research Institute outlined the drop in average spend by China’s high-net worth shoppers, the first ever APTRA India Conference last month shone a light on other markets which must grab the attention of brands and retailers worldwide.
In fact, India is just one of the markets that should be considered. The country certainly has great potential, with a growing middle class, increasing demand for spend and travel, and a luxury sector which is set to grow 3.5 times by 2030. However, it is not alone, I am not the only one who has previously highlighted other areas of Asia, such as Vietnam, where the luxury sector was worth $957.2 million in 2023 and is set to grow 3.2% per year until 2028.
So growth is assured then? Absolutely not. These new consumers will not just lap up what ever they are given. More so than any emerging shopper group in history, they are informed, self-aware and want a service and offer which meets their specific needs – anything less will not do.
So here are a few key areas I feel brands and retailers alike need to consider as we plan for the bright future which is certainly on offer.
Classic luxury means bragging rights
Many shoppers in emerging markets are banking on classic luxury brands because they bring status and bragging rights. These are shoppers who have money and are keen to spend it – and then share news of their purchase. But they do not just do this with items; these shoppers want premium experiences, hotels and services, which they can use as status symbols too.
Experience over possession
In fact, possessions are secondary for many of these shoppers. The sharp growth in ultra-premium shoppers in India, for example, is coming at the same time as a growing demand for travel. The country’s rocketing international travel market underlines the desire of shoppers to discover something new. As luxury brands expand their presence in the country, capturing the attention of those heading internationally requires something more.
Information is king
All of these shoppers are informed and, as we have seen elsewhere in the world, will not be fooled by pricing tricks or other shortcuts. In India, for example, duty taxes mean the price of some luxury goods is inflated, so shoppers will seek better value elsewhere. Trying to make an easy win with overpriced goods will not fool connected consumers from emerging markets any more than it does others.
Get your people right
I have said so many times that people are our most valuable asset, and it is true here too. In fact, it is more true than ever. All of these new shoppers emerging into the market bring their own demands and needs, and brands and retailers alike must understand them and be able to deliver on them. This takes data and insights. It also requires deep cultural understanding, from staff who speak the language, to genuine diversity in the decision-making room to ensure the business reflects its consumers.
Focus on youth
India has a bigger young population that both China and the US, and it is these shoppers who are emerging as a global retail force. The same is true in Vietnam, where young shoppers are gaining both power and potential. A good retail offer will speak to the ideals and needs of these young shoppers. More established consumers will follow clearer rules, but the younger generation are evolving fast and expect us to keep up.
Be accessible
Accessible luxury is a key part of the market for growing markets, but that is not what I mean here. These shoppers want experiences and moments, and then they do not want to ruin the experience with complex payment options. Credit card ownership in India has grown rapidly in recent years, and the digital engagement of China’s young consumers is an example of how easy Millennial and Gen Z consumers expect this to be. The right staff need to be equipped with the right kit to make the whole process seamless and enjoyable.
Do not generalize
I do not mean this to be an ironic as it seems. These points all relate to emerging shoppers in many markets, but they are not specific enough to account for every shopper. I cannot stress enough the importance of understanding exactly who is walking through your store, discovering what will engage them and then setting up your team to deliver exactly that.
The future is bright, but we must earn it the right way.
