China’s millennials and Gen Z are now looking beyond luxury brands in favour of lasting, meaningful experiences | South China Morning Post

Affluent Chinese spenders are today no longer content with flashing luxury products and designer labels, instead preferring to spend on enriching experiences and personal growth

This article was originally written by Tamsin Smith for Jing Daily and South China Morning Post

Two-thirds of high-net-worth Chinese consumers say personal growth is more important than wealth, according to research. For retailers and the travel industry, this report suggests that companies need to offer more than just luxurious goods to entice lucrative top-tier Chinese clients.

The research, spearheaded by HSBC Jade – the bank’s highest membership level – surveyed more than 900 affluent individuals from key markets including China, to gain insight into their thoughts on enrichment, wellness, travel and purpose. Alongside a strong desire for personal growth, in mainland China, 74 per cent of high-net-worth individuals stated that making a positive impact on the world was as important as making money.

“As the digital savvy, sophisticated millennial generation in China grow up and start to become parents, they are looking for a more fulfilling experience”

- Alicia Liu, director, Singing Grass Communications

According to the report, released on October 21 by HSBC Jade and Scorpio Partnership, the absolute wealthiest Chinese individuals are looking for a holistic consumer experience through which they can grow on a personal level.

Whilst their predecessors were brought up with a desire to establish status through the acquisition of recognisable wealth in the form of luxury brands, China’s younger demographics are different. Those born after 1990 or 1995 – corresponding loosely with Gen Z – have been raised in a culture of developing the self through education, cultural learning, travel and physical well-being. This research solidifies the idea that for the Chinese luxury industry to continue to grow, it can no longer rely on expensive labels and designer products.

Alicia Liu, director at Singing Grass Communications, a business consultancy with a focus on culture and luxury, said: “As the digital savvy, sophisticated millennial generation in China grow up and start to become parents, they are looking for a more fulfilling experience for themselves and the people they care about.

“In my opinion, luxury brands must set out to meet this growing demand and produce an enriching lifestyle solution, rather than simply offer a product. Some of the brands we have advised have managed to build a genuine friendship with key influencers, by helping customers broaden their horizons through a cultural learning experience.”

In response to this, HSBC Jade has launched the “enrich list”, a new bucket list for affluent consumers. Chinese individuals are seeking more fulfilling and enriching experiences, and the list is built on four fundamental pillars: curated adventure, ultimate well being, game changers, and “a purposeful life”.

The list includes experiences such as “find your tribe”, where HSBC Jade’s wealthy clientele can visit the Amazon and discover the Kayapó tribe, from the comfort of an exclusive camp, complete with private chef and host. Another example sees the Sangha Retreat By Octave, by Suzhou’s Yangcheng Lake, cater to wealthy individuals with an immersive retreat combining ancient Chinese traditions with the most up-to-date neuroscience technology.

Marie Tulloch, senior client services manager at Anglo-Chinese marketing consultancy Emerging Communications, explains that for product-focused brands looking to benefit from the “experience economy”, there needs to be a significant shift away from brand ostentation.

“These consumers are seeking the niche and subtle, partly to define an individual’s personal brand, and often as part of a consumer community,” Marie explains. “One of the most obvious ways in which this is reflected is in the decline of K-beauty that is considered too unnatural, in favour Chinese brands that provide a home-grown aesthetic that better reflects the desire for a more sophisticated appearance.

“The same trends apply to accessories and clothing. High-quality, hard to obtain products and brands reflects the desire of consumers to flaunt their superior choice, whereas subtle high-end style has become a power statement.”

“Chinese culture, for literally thousands of years has valued knowledge and education above material wealth – brands need to be ready to tap into this cultural realignment” - Arnold Ma, CEO and founder, Qumin

So for brands tapping into this new culture of experiences, it’s important to offer a consistent brand image, but one that reflects a consumer desire for low-key sophistication. For Arnold Ma, CEO and founder of Chinese creative digital agency Qumin, the results of the report are not surprising. Despite the previous generation of Chinese consumer being known for a love of labels, he explains that in fact, this overt display of branded goods is what should be considered the cultural anomaly.

“We love going back to people and cultures and I think in this case it’s super relevant. Chinese culture, for literally thousands of years has valued knowledge and education above material wealth,” he said.

“It’s not surprising that with such fast socioeconomic changes and new wealth that people would want to display their achievements – but like all things, as the situation [the economy and people] mature and settle, the culture and people will go back to the status quo. Brands need to be ready to tap into this cultural realignment.”