Magazines Archives - 2010 February

New study shows ‘luxury logo lust’ strong in India and Hong Kong
Story 10 - News

The world’s economies may be in the doldrums but this has not inhibited Asia’s well-heeled consumers, led by those in India and Hong Kong. A recently released global study on luxury brands by market intelligence firm Synovate revealed that the two Asian markets are among the world’s top markets where “luxury is a lifestyle, with almost one in four consumers, compared to 17% across the globe”; or, as Synovate put it, the study showed 79% of those surveyed in India and 68% in Hong Kong have “luxury logo lust”.

Synovate’s luxury research expert and CEO for the UK, Jill Telford, said people have an odd relationship with luxury. She explained: “Some of us feel we deserve it and revel in unabashed luxury. Some indulge in it but feel they maybe should not have. Some cannot afford it, but want it. And for many, it’s
simply not even a consideration ... The basics in life are tough enough to obtain.

“Of course, a recession makes luxury retail even more challenging. Selling things that arguably people do not need during a time when many are at least morally forced to examine their spending
patterns makes for interesting times.

The luxury marketers that are doing well are doing so by knowing their markets and positioning their products just so.” The survey, which included interviews with 8,100 consumers across 11 markets, looked into luxe dreams, extravagance, indulgence and the finer things in life.

For many, luxury just is — you do not show a logo. For others, it is all about the logo. Generally, 47% across all 11 markets said they prefer to buy logoed items, 34% would choose non-logoed
items and 18% do not know.

Synovate said the study showed a classic divide in luxury attitudes; the markets that most prefer logoed items are all places where it is acceptable to flash purchases, topped by India (79%), Hong
Kong (68%) and the UAE (58%). The markets that are more likely to appreciate a subtle luxury purchase, preferring nonlogoed items, are Brazil (51%), France (47%) and the UK (46%).

Telford said: “The UK result doesn’t surprise me — they don’t encourage showing off here. Of course, in Hong Kong, flashing your purchases and spending power is more than acceptable.”
Hong Kong’s qualitative director at Synovate, Salina Cheng, added: “While many in Hong Kong are sophisticated luxury shoppers, they still want to make known to people around that they can
afford certain luxury brands.”

The Synovate survey set out to determine what people most enjoyed about buying and owning luxury — do they see dollar signs and brands, or simply feel fabulous, or both? Findings revealed the
top three overall pleasures in buying and owning luxury are:

• It makes me feel special to own it — 28% across the 11 markets, led by the US at 45% and the UK at 44%.
• The way it is made or feels — 27%, led by the UK at 35% and the US and France, both 32%.
• The reputation of the brand — 14%, led by 28% in India and 20% in each of France and Hong Kong.

Commenting on the Hong Kong market, Cheng said: “Being able to buy and own something from a luxury brand is a symbol of status and wealth to Hong Kong consumers. Reputable brands such as Louis Vuitton and Chanel are most sought after and appreciated by
the general public. They are preferred as they are considered a ‘safe choice’ to impress other people.”

When it comes to luxury-brand items, Hong Kong consumers top the globe in only wanting to buy them new. A hefty 70% in Hong Kong had indicated this, compared to 49% across the globe.

Said Cheng: “Hong Kong remains one of the most affordable places to buy luxury goods — so why buy second hand if one can buy new? “Furthermore, consumers have the common belief that
‘only those who want luxury goods but cannot afford them would buy second hand.’ People strongly believe that new is best and provides higher status. The price difference between brand new and
second hand, especially for the mostwanted brands or items, may not always be very substantial either.

Thus, thereis a sense of more value-for-money by getting their luxe new.”

Once consumers have decided to buy luxury, do they buy on the spot, or research extensively, or land somewhere in the middle? The Synovate study found out that the top shopping style, chosen by
28% of all respondents, was: “I research every other alternative and then buy the item of best value to me.”

Led by Hong Kong, 29% would “walk away and think about it; if I still want it I buy it”, 10% higher than the
global average. A majority of Hong Kong consumers (61%) look for their gauge of luxury and the latest luxury finds in pictures of celebrities in magazines or on television, compared to 48% globally.
“Hong Kong consumers look up to their glamorous icons as a benchmark for the latest fashion and trends. Brands that have sponsorship agreements with celebrities appeal to consumers,” said Cheng.

Most Hong Kong shoppers prefer getting information on their luxury brands from offline channels — 66% said they do not search for such information on the Internet. The remaining 34% in Hong Kong indicated they seek out luxury news from forums, blogs or via social networking sites, 14% higher
than the global average.

The survey also identified the top luxury buys if “money was no object”, and the top four choices were:

• Car — 31% across all markets, including 57% in Brazil, 51% in the US and 50% in Canada.
• Fine jewellery — 11%, led by 28% in the UAE and 24% in India.
  
• Designer clothing — 11%, topped by 25% in India.
• A great gadget — 11%, led by 20% in Hong Kong and Spain.

Other highly desired items included luxury watches, topped by 15% in the UAE and 13% in Hong Kong while 13% of Taiwanese chose designer leather goods like shoes or bags. Interestingly, 22%
of Dutch respondents said: “Nothing, I would not purchase any of these items”, despite this being a ‘money no object’ question.”

The survey also asked about “little” luxuries that people are most likely to purchase, and found that F&B luxuries topped the list: F&B item — 19% across all markets surveyed, topped by 33% in the UK, 31% in the US and 30% in Brazil; and sporting equipment or clothing — 18%, led by 32% in Taiwan and 25% in Hong Kong.

Managing director for Synovate in Taiwan, Jenny Chang, put the sporting equipment choice down to the LOHAS (lifestyles of health and sustainability) trend. She said: “It’s now quite fashionable to be healthy and ‘outdoorsy’. A great many people are into bike riding on the weekends and many splurge out on bicycles and accessories.”

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