As Asia continues to steadily recover from the coronavirus pandemic, luxury brands that continue to invest in the market should be cautiously optimistic about these efforts paying off into 2021.
During a Luxury Consumer Outlook 2021 webinar hosted by Agility Research & Strategy, managing director Amrita Banta shared what the luxury sector can expect from high-net-worth individuals across Asia. While international travel remains restricted, those budgets have been diverted to luxury goods purchases, particularly in beauty, jewelry, automotive and consumer technology.
“What we’re looking at as we’re going forward is a cautious optimism going into 2021,” Ms. Banta said. “There is a lot of hope in a lot of categories and we’ve seen certain markets do much better than others.
“We’ve seen that the high-net-worth and the ultra-high-net-worth consumers are actually the most resilient,” she said. “But there is no doubt the toll that COVID has had on all of us.”
Recovery in Asia
Nearly a year after the COVID-19 outbreak began in China, the world’s largest luxury market has experienced a V-shaped recovery.
Other markets in Asia including Korea, Taiwan and Japan are doing well due to managing spread of the coronavirus and having large domestic markets for luxury goods.
Well-known iconic and trusted luxury brands saw the quickest recoveries, according to Ms. Banta. Some brands appear to be facing shortages because goods are selling out faster than pre-pandemic.
Some HWNI seem to be motivated to buy less, but more expensive, luxury goods, further putting smaller and emerging high-end brands at risk. The consumers who continue to shop in-store are the most brand loyal and will spend more than aspirational luxury shoppers.
Affluents in Asia are also fueling ecommerce growth. According to research from Agility, more than half of respondents from India and more than a third of respondents from China now preferring to buy luxury goods online because of the added convenience.
As the pace of life slowed down, consumers also found themselves with more to think through purchases. Affluents have been able to reassess their perception of brands and sustainability has become more of a priority since the start of the pandemic.
“There’s a willingness to pay a premium for brands that are sustainable, for ethical brands or brands that are conscious of the world around them,” Ms. Banta said. “There is definitely luxury with a purpose and a more responsible consumer.”
To read the full article, please click here