Millennials in China are the biggest purchasers of luxury goods in Asia Pacific, followed by South Korea and Hong Kong, according to data by Mastercard. Chinese millennials plan to spend close to double the Asia Pacific average on luxury goods in the next year.
High-end tech gadgets are the most popular of the luxury items with 25 per cent of millennials in Asia Pacific planning to buy an item such as a smartphone or tablet computer in the next year. This is followed by designer clothes and leather goods (17 per cent) and jewellery (17 per cent).
In terms of time, overall, most millennials in the region take approximately a month to consider and research their luxury purchases, led by those in India (64 per cent), China (51 per cent), South Korea (48 per cent) and Taiwan (48 per cent).
The study also highlighted that more millennials in Asia Pacific (a quarter) buy on impulse than those over thirty (a fifth). Thai (60 per cent) and Indonesian (50 per cent) millennials are the most impulsive shoppers in the region with at least half buying luxury goods on impulse, above the regional average of 26 per cent. Vietnamese millennials are the most careful shoppers – the majority will only buy a luxury item after two to six months of extensive research (45 per cent), more than the regional average of 20 per cent.
Western brands are preferred over regional or local by over a third of millennials in APAC. While more than half of millennial shoppers in China, Vietnam, South Korea and Hong Kong prefer Western brands, the majority in India and Indonesia would rather buy local. The top three reasons for preferring Western brands were reliability of quality, followed by value for money and brand loyalty.
The local brick and mortar store, instead of ecommerce sites was preferred by the majority of millennials when choosing where to purchase luxury goods from. Meanwhile a fifth prefer to buy luxury items in-store when travelling overseas, this is especially true of Chinese millennials, 51 per cent of whom are most likely to buy a luxury item in-store while travelling.
Millennials in Indonesia are the most likely to spend more on luxury goods in the next year than the year before (47 per cent). Across Asia Pacific, most consumers (40 per cent) intend to spend the same amount as they did the year before, 22 per cent plan to spend less while 19 per cent plan to spend more.
Eric Schneider, Region Head, Asia Pacific, MasterCard Advisors, said “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. This reflects a shift in priorities away from designer clothes and jewellery 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.”