This article originally appeared on JingDaily.com
Read the original article here: https://jingdaily.com/luxury-wealthy-chinese-millennials/
Young, wealthy Chinese consumers broadly fall into two camps: the first is the ‘fuerdai’ (literally ‘second generation rich’), or millennials who have inherited wealth from their parents and spend it on luxury goods in order to gain status and be recognized as part of the elite. The second is post-90s ‘explorers’, who are not so hung up on brands and designer labels. They’re a new generation of 20-somethings who focus on personal experience, living for the moment, and finding the value in simple things.
Understandably, their spending patterns and brand favorites are vastly different. As these groups of consumers represent a great deal of purchasing power, it’s worth it for luxury brands to find out more about them and find out how to tailor their digital approach to each group, rather than applying a ‘one size fits all’ strategy. Below is a guide to fuerdai and post-90s explorers, along with case studies detailing past luxury brand campaigns that have targeted these particular markets.
Attracting pleasure-seekers using digital status
Fuerdai are driven by ostentatious displays of wealth and status. This may not make them popular with their less well-off peers, but their deep pockets and lack of concern about spending (one of the richest men in China infamously bought two gold Apple watches for his dog and took a picture of him wearing them for Instagram) make them an ideal audience for luxury brands in China.
It’s not about appealing to their hearts—instead, marketers have to speak to their ego. In line with the VIP marketing aimed at regular luxury customers, making pleasure-seekers feel like they are part of an exclusive club that is just for elites feeds their desire for status. This is exactly what Porsche did with its integrated WeChat campaign ‘Your VIP day’, where customers that booked in for a service on a specific date could use WeChat to book a free luxury treat and, most importantly, share it with their friends and followers. The monetary value of the treat itself, from spa day to a yoga lesson, was not as important as the ability to let everyone know they owned a Porsche.
Roger Dubuis also opted for a WeChat promotion which appealed to the fuerdai’s extravagant aspirations. In order to decide which watch from their Excalibur range was the ideal match for them, the “Daring Partner” campaign invited users to choose between a variety of elite lifestyle choices—for example, a yacht or a sports car. The assumption that they were accustomed to this level of luxury in their lives and had the ability to pay upwards of US$70,000 for a timepiece went straight to the heart of what matters to this audience.
What ‘luxury’ means to this audience: elite, exclusive, extravagant
Appealing to the ‘self-aware’ post-90s using online adventures
The post-90s generation of luxury consumers still has access to significant amounts of money, but they don’t want to associate themselves with the fuerdai’skind of ostentation. Instead, they want to be known for their uniqueness and thoughtfulness. According to market research experts China Youthology, the post-90s audience want a lifestyle which “includes both… material consumption and a growing cultural consumption. More importantly, [a] quality life must be built around personal choices and filled with one’s individual traits.” Luxury brands need to stand for something other than wealth and bragging value if they want to sell to this demographic—more than simply giving customers what they need, they have to reflect what they want to say about themselves morally, spiritually, and culturally. Above all, they’re looking for authenticity and a connection with how they live their lives.
British Airways tapped into this desire with its “Flying the Nest” WeChat campaign, themed around a Chinese student who receives a surprise visit by her parents while studying in the UK. Designed to reflect the myriad of emotions experienced by young people living far away in a culture entirely different from theirs—yearning for home and worrying about parents as well as wanting to experience and explore new ways of life—the campaign encouraged users to download a handy travel guide within WeChat or via a QR code featured on a promotional video which would metaphorically take them by the hand and lead them through the vagaries of British language and custom. For post-90s consumers, this is a rich seam to mine. While the experience is luxury all the way (the student’s parents fly first class on British Airways, for example), the sentiment is about heart and home. The campaign itself, recognized as one of the most persuasive of 2016, ticked all the boxes for post-90s young people as it was an authentic, real-world reflection of both individual and family values.
More conventional luxury brands can also engage this demographic if their proposition chimes with its sensibilities. For example, in direct contrast to Robert Dubuis’ campaign which celebrated everything extravagant and expensive, Montblanc adopted an approach which appealed to the more spiritual and culturally invested aspect of its young audience. Knowing their interest in astrology, the luxury watch company engaged Key Opinion Leader and astrological guru Uncle Alex to host a live streaming event to promote its Bohème collection. As part of the event, the audience was invited to type different keywords into the Montblanc WeChat account, each of which triggered a unique push message featuring the flower most associated with a specific Bohème spirit. Almost 2 million people watched the live broadcast, attracted not only by the prospect of a new luxury watch, but also by the opportunity to engage with a post-90s KOL who reflected both their demographic and their values.
What ‘luxury’ means to this audience: individuality, personality, honesty
Redefining luxury for the new age of consumers
These two distinct types of young, wealthy consumers in China with their individual wants, needs, and behaviors have inevitably led audience-aware luxury brands to redefine their approach to the market. It’s no longer enough to simply launch a luxury product and assume that it will find an audience—brands will need to identify their key markets and build a strong digital message which will appeal to either the ego (for the fuerdai) or the heart (for the post-90s).
Elisa Harca is a regional director for Asia at Red Ant, a technology partner that empowers retailers to connect online with offline, delivering smarter ways to drive innovation and fully connected retail experiences.