5 Ways Wealthy Chinese Gen Zers Are Redefining Luxury

Chinese consumer spending has tightened as the economy falters.

China News Service via Getty Images

• Gen Z Chinese shoppers prioritize craftsmanship and brand stories over luxury labels.
• Experts say this generation values ​​sustainability, slow living and mindful consumption.
• Gen Z’s preference for understated luxury aligns with China’s crackdown on flashy displays of wealth.

Chinese buyers continue to be passionate about luxury goods.

And although Chinese consumers’ belts have tightened as the economy falters and luxury brands feel the effect, the country is expected to become the world’s largest personal luxury market by 2030.

Luxury players are now thinking about how to attract the next cohort of buyers: Generation Z, broadly defined as those born from 1997 onwards.

Experts say this generation has different preferences when it comes to luxury than their millennial and Gen X counterparts.

1. Generation Z is focused on craftsmanship

Miu Miu is the favorite of Generation Z.

Jeremy Moeller/Getty Images

Gen Z shoppers in China are less concerned than their Western counterparts about status symbols such as luxury labels or logos, instead prioritizing the “perceived value of an experience or story behind a luxury item,” Jien Goh, a trends forecaster at WGSN, told Business Insider. .

This means Gen Z shoppers are more interested in the craftsmanship of the items and how the story or emotions associated with the company can be reflected in them, she added.

Writing for Jing Daily, Daniel Langer, professor of luxury strategy at Pepperdine Graziadio Business School, noted that a brand like Gucci is struggling in China because it has maintained a “product-centric” approach rather than a “customer-centric one “. .

Brands that have been successful with Gen Z shoppers have developed intricate stories about their brand and, subsequently, the wearer, experts say.

2. Sustainability and slow living are trending

China’s newest generation of luxury shoppers also want to incorporate their values ​​into their purchases.

Goh said WGSN has been tracking a trend of “rural revival” in the Asia Pacific region, particularly in China.

“At the heart of this trend is the desire to live consciously, at a slower pace and a new mindset that sees well-being and longevity as the ultimate indicator of luxury,” she said.

Elisa Harca, co-founder of consulting firm Red Ant Asia, told BI that she had noticed a similar movement.

She has seen cultural trends, such as choosing to take career breaks rather than aggressively climbing the corporate ladder, filtered into Gen Z buying patterns.

For example, there has been an increase in consumers “choosing to spend on items that add to their lifestyle experience versus just materialistic purchases,” such as health and wellness-related brands, Harca added.

3. They are made with shiny logos

China’s leader Xi Jinping has cracked down on overt online displays of wealth, and some social media users’ accounts have been blocked over flashy posts.

Because of this, some Gen Z consumers have turned to quieter displays of wealth that align more closely with Chinese representations of “old money.”

Backstage at a Valentino show in Beijing.

WWD/Getty Images

Like the ‘quiet luxury’ trend in the West that dominated the fashion agenda in 2023, China’s ‘laoqianfeng’ trend means brand logos are out and finer materials, muted colors and natural makeup are in.

Goh said China’s wealthy are undergoing an intergenerational wealth transfer “from the first-generation ultra-affluents to younger generations that include Gen Z.”

She said that compared to their self-made parents, Gen Z is much more “versed and sophisticated in their approach to luxury”.

Addressing the needs of a “quieter” generation alongside the needs of long-time dedicated consumers of an older generation who are more inclined towards overt branding will likely require innovation from brands.

4. “Luxury shame” turns some young buyers away

Another reason why Gen Z in China is looking for more subdued displays of wealth could be because of “luxury shame”.

Analysts at Bain noted this phenomenon in a June report. It is a desire for people to minimize overt displays of opulence during times of perceived financial crisis – something that happened in the US after the financial crisis of 2008-2009.

This may partly explain the emergence of a “more rational cohort of luxury consumers”, said Goh, who may be more inclined to be selective about how they spend their money.

5. They like to mix luxury with fast fashion

Harca said Gen Z is more likely to mix and match when it comes to fashion.

“He might have a luxury bag, but he’s wearing pants from a premium brand and a T-shirt from a fast fashion brand,” she added.

This allows Gen Z to “create their own style and shop where they think ‘it’ is,” she added, allowing them to be more unique in their fashion choices.