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Singapore, 22 September 2015 – MasterCard has revealed that millennials (18-29 years old) in China are the biggest purchasers of luxury goods in Asia Pacific, followed by South Korea and Hong Kong. They plan to spend close to double the Asia Pacific average on luxury goods in the next year.
The most popular luxury items are high-end tech gadgets, with 25 percent of millennials in Asia Pacific planning to buy an item such as a smart phone or tablet computer in the next year. This is followed by designer clothes and leather goods (17%) and jewellery (17%).
Overall, most millennials in the region take approximately a month to consider and research their luxury purchases. More millennials in Asia Pacific (a quarter) buy on impulse than those over thirty (a fifth).
Meanwhile, over a third of millennials in the region prefer Western brands over regional or local, however there is a marked difference across the region. 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.
When choosing where to buy luxury goods from, the majority of millennials still prefer purchasing from local brick and mortar stores (64%), instead of local e-commerce sites (9%). Meanwhile a fifth prefer to buy luxury items in-store when travelling overseas, this is especially true of Chinese millennials, 51 percent of whom are most likely to buy a luxury item in-store while travelling.
The results are based on interviews that took place between between May and June 2015 with 2,272 millennials (18-29 years old) across 14 markets in Asia Pacific.
- Millennials from China intend to spend on average US$4,362 on luxury goods over the next year, nearly double that of the Asia Pacific average of US$2,584. South Korea (US$2,638) and Hong Kong (US$2,584) round off the top three.
- Overall, the majority of millennials in the region will take under a month to research and consider a luxury item before buying it (44%), led by those in India (64%), China (51%), South Korea (48%) and Taiwan (48%).
- Thai (60%) and Indonesian (50%) millennials are the most impulsive shoppers in the region with at least half buying luxury goods on impulse, above the regional average of 26%.
- The most careful millennial shoppers are from Vietnam – the majority will only buy a luxury item after two to six months of extensive research (45%), more than the regional average of 20%.
- Over one-third of millennials across the region prefer western brands to local and Asian brands. More than one in two millennials in China (66%), Vietnam (60%), South Korea (59%) and Hong Kong (52%) would pick a western luxury brand over a local or Asian luxury brand. However, in Indonesia (61%) and India (50%), a large majority of millennials would rather buy luxury goods from a local brand.
- Most millennials in the region purchase luxury goods in-store rather than online – this is especially so when they are on sale locally (43%) compared to when they are at full price (23%). Only a small percentage of millennials in the region shop for luxury goods on local (9%) and overseas sites (4%).
- Chinese millennials are the most likely to buy luxury goods in-store when travelling overseas (51%), whereas the majority of consumers in India (81%) and Indonesia (50%) buy luxury goods locally in-store at full price.
- Millennials in Indonesia are the most likely to spend more on luxury goods in the next year than the year before (47%). Across Asia Pacific, most consumers (40%) intend to spend the same amount as they did the year before, 22 percent plan to spend less while 19 percent 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 mis-placed 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.”
MasterCard and its Suite of Research Properties
The MasterCard Index suite in Asia/Pacific, Middle East and Africa includes the long-running MasterCard Index of Consumer Confidence, as well as the MasterCard Index of Women’s Advancement, MasterCard Survey on Online Shopping, MasterCard Index of Financial Literacy, and the MasterCard Index of Global Destination Cities. In addition to the indices, MasterCard’s research properties also include a range of consumer surveys including Ethical Spending and a series on Consumer Purchasing Priorities (covering Travel, Dining & Entertainment, Education, Money Management, Luxury and General Shopping).
MasterCard also regularly releases Insights reports providing analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific, Middle East and Africa region. Over 80 Insights reports have been produced since 2004. MasterCard has also released a series of four books on Asian consumer insights, authored by Dr. Yuwa Hedrick-Wong, Global Economic Advisor for MasterCard and published by John Wiley & Sons.
MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardAP and @MasterCardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.
Georgette Tan, MasterCard, firstname.lastname@example.org, +65 6390 5971
Samantha Yong, Weber Shandwick, email@example.com +65 6825 8053
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