To the layperson, the three words “Affluent Asian Millennials” may conjure images of overworked overambitious people under 35 who spend most of their hard-earned money on coveted luxury goods or experiences on their growing wish lists.
While our research over the years has indicated that these millennials are inclined to purchasing luxury goods, both at physical stores and online; it turns out that there are other things they prioritize over purchasing luxury products. So for the purpose of this monitor report we look at luxury as tangible and intangible luxury. Tangible being the physical luxury products and intangible being health, travel and spending time with family. This year, this new development might be due mainly to the uncertain nature of the world economy and geopolitical events.
With our Affluent Insights Luxury Study 2017 - Asian Affluent Millennial or Generation AAA (a term coined by Agility Research & Strategy, which stands for their key psychographics; Affluent, Ambitious and Aspirational), we have uncovered the top 3 priorities of Affluent Millennials in China, Hong Kong, and Singapore. These are in fact health, travel, and spending time with family.
In many ways, Affluent Millennials in Asia are becoming increasingly health conscious. They start to care more about what they eat, are exercising more, and are overall more in tune with wellness. This trend has contributed to more sales of athletic and sportswear in the region for example. Furthermore, when it comes to travel, this is among the top priorities for this group. It is the third priority that we are quite surprised about – spending time with family. It seems that health and spending time with Family has become a new luxury.
Perhaps the most compelling reason would be because of the current uncertainties in the world, young millennials are valuing human relationships, something they can hold onto and an anchor in what is an uncertain world. This re-assurance is the family.
This has several implications for brands in terms of their marketing and communication strategies in the Asia Pacific. Should brands create emotional campaigns that touch base on the importance of family togetherness?
Dolce & Gabbana’s “Family-Themed” Campaign F/W 2015
By looking at the aggregate data of all the markets surveyed, we have revealed different insights, strategically uncovering current trends and predicting future trends among Affluent Asian Millennials. Among which are the following:
Many Affluent Asian Millennials are curious to try out Cruise experiences.
Affluent Asian millennials are trying out their next travel experiences, including travelling to new destinations and doing things they can’t do in their home towns, such as skiing and cherry blossom viewing in Japan.
However, it can also be predicted that many of them will be spending more on cruises in the next 12 months, even going as far as Antarctica on a cruise for a new sense of adventure.
Tiffany and Co. is slightly more popular than Cartier.
When it comes to jewelry choices, the two jewelry giants Tiffany and Co. and Cartier are almost equal in popularity and rate of ownership among Affluent Asian Millennials. The former, however, is slightly more popular by less than 5% difference than the latter in our research findings. This is a particularly interesting insight considering Tiffany and Co. is often associated more strongly with millennial consumers.
Still, in China, the Chinese brands Chow Tai Fook and Chow Sang Sang dominate the market, taking the top 2 spots on the list.
Expenditures on Travel and Personal Luxury goods are almost equal, whereas spending on travel slightly beats spending on personal luxury goods, except in China. And most of the time, it is for self-reward.
The Affluent Asian Millennials might have shifted their main intangible priorities away from luxury goods, but it does not mean that they are not still spending their money on luxury goods. In fact, on average, they could spend almost as much money on personal luxury good as they would spend on travel.
The most sought after attributes from luxury brands include quality of the products, uniqueness, and exclusivity. They also most likely purchase luxury goods to reward themselves.
Audi, Mercedes Benz, and BMW are among the top luxury car brands owned and aspire to purchase.
There is some sentiment to believe that car ownership rates are declining among millennials. However, for Affluent Asian Millennials, cars are still a luxury to aspire for, especially when they are key brands such as Audi, Mercedes Benz, or BMW.
These three car brands are ranked in the top luxury car brands owned by this demographic, and our research shows that the three will remain on top in the near future. Perhaps these brands fill both the tangible product and the intangible experience of driving at the same time.
Chanel and Dior are the two main fashion brands aspired to purchase in 2017
The two brands can be predicted to increase in market share this year, as many Affluent Asian Millennials aspire to get their hands on them.
At the current moment, the top brands owned include Chanel, Dior, Louis Vuitton, and Burberry. In China, almost 50% of Affluent Chinese Millennials own something from Chanel, which is an incredible market share.
David Beckham is among the most popular celebrities to look up to
Interestingly, David Beckham is one of the most popular celebrities to look up in the surveyed markets, besides local celebrities such as Jackie Chan, Fan Bingbing, and Andy Lau.
With the rise of health consciousness in Asia Pacific, brands should be open to placing superstar athletes in their advertisements and marketing campaigns, as it can surely be predicted that viewing of sports, such as soccer and tennis, will be on the rise.
What Does All This Mean for Brands?
The most crucial insight is that while Affluent Millennials in Asia have current top priorities which seem different from their aspiration to acquire luxury goods, the purchasing still happens, albeit more grounded decision making behind luxury purchases, rather than just for the sake of consuming conspicuously.
When creating winning strategies for the Affluent Asian Millennial consumers, brands need to understand these 7 key words and phrases: health, travel, spending time with family, quality, uniqueness, exclusivity, and self-reward. These should be used as the guiding terms when communicating with the Asian Millennials and developing marketing campaigns that pull at both the tangible and intangible levers of purchasing behavior.
THFLEX Rafael Nadal Edition Tailored Capsule Collection, Tommy Hilfiger 2016