Specialty stores have long been the cornerstone of high-end and luxury brand strategies, offering a curated in-store experience that sets them apart from mass-market brands. These physical spaces are integral to maintaining the aspirational allure of luxury goods.
However, the rise of online purchasing raises a critical question: does the convenience of digital shopping erode the dream value that luxury brands cultivate?
Data from 2022 paints a nuanced picture. While the overall sales in China’s luxury market fell to 956 billion yuan—a 4% year-on-year decline, marking the first instance of negative growth—online sales surged in the opposite direction. Reports reveal that online sales in China’s luxury sector reached 200 billion yuan in 2022. Moreover, international luxury brands saw a 31% increase in online transactions, which now account for 21% of the total market.
China’s Luxury E-Commerce Market Holds Significant Growth Potential
China’s luxury market is expansive, yet the penetration rate of luxury e-commerce remains relatively low. Combined with the country’s advanced internet and logistics infrastructure, this creates substantial opportunities for growth in the luxury e-commerce sector.
资料来源：欧睿国际，中金公司研究部
The market features numerous local participants, including platforms like Secoo, Xiu.com, and Redbubble, as well as luxury sections within major e-commerce giants such as Tmall and JD.com. Additionally, second-hand consignment platforms like Idle Fish are gaining traction. However, China’s online luxury market is still highly fragmented, with local platforms predominantly catering to discounted and second-hand goods. This fragmentation opens the door for international luxury e-commerce players to enter the market and capitalize on the growing demand for online luxury shopping.
Increasing Influence of Online Luxury Marketing Among Young Consumers
The proportion of young people purchasing luxury goods through online channels is steadily rising. Data from 2021 reveals that 68% of young consumers are influenced by content shared by celebrities or bloggers when making purchasing decisions. This trend highlights how online marketing for high-end and luxury brands is becoming a key driver of growth.
资料来源: TMIX BCG
Since 2007, the growth rate of luxury e-commerce sales has consistently outpaced the overall growth of personal luxury goods sales. During the pandemic, online sales of personal luxury items surged significantly. However, with the easing of pandemic restrictions, the growth has normalized, aligning with broader market trends.
| Year | Compound Annual Growth Rates | Factors influencing growth |
| 2007-2015 | 15% | In the early stages of luxury e-commerce development, the base was relatively low and growth was fast. |
| 2016-2019 | 10% | Luxury goods sales through tourism retail channels have increased, to some extent eroding the sales of luxury goods through e-commerce channels. Luxury brands still tend to serve customers directly through offline channels. |
| 2020-2021 | 28% | In 2020, offline channels were impacted, leading to particularly rapid growth online (with a YoY increase of 34%). In 2021, as the pandemic gradually eased, physical stores resumed operations, and online channels faced the impact of a high base, resulting in a certain slowdown in growth (with a YoY increase of 22%). |
| 2022-2025 | 13% | As the impact of the pandemic weakens, the growth of luxury e-commerce is gradually normalizing, mainly driven by the growth of brand-owned e-commerce and third-party e-commerce platforms. We expect the latter to benefit from their rich SKUs and further increase penetration. |
资料来源：欧睿国际
Generation Z is Redefining Marketing Strategies of High-End Brands\
Traditionally, many luxury brands avoided online marketing, deliberately distancing themselves from e-commerce. However, the past three years, marked by the COVID-19 pandemic, have drastically altered consumer behaviors. Faced with this unprecedented disruption, luxury brands once resistant to digital channels recognized the value of online engagement. They have since embraced innovations such as live-streaming e-commerce, e-commerce platforms, virtual exhibitions, and immersive digital spaces.
Data indicates that China’s luxury market has reached a pivotal demographic shift, with Generation Z (post-90s consumers) accounting for 50% of luxury buyers. Their spending is projected to grow at a robust rate of 25% to 30% in the coming year.
Digital marketing has become an important means for capturing the attention of young high-end consumers. Rather than competing, online and offline purchases complement one another. While online purchases may lack the immediate experiential allure of physical stores, they do not diminish the prestige of luxury brands. In fact, data highlights that online platforms are no longer limited to discounted goods but have become key battlegrounds for luxury and high-end brands alike.
The Rise of ROPO, the Bridge Between Online and Offline Shopping
The trend of researching online and purchasing in physical stores, known as Research Online, Purchase Offline (ROPO), has become a key pathway for luxury consumers. Young shoppers often gather information about products online before visiting physical stores to finalize their purchases.
Recognizing this shift, many high-end brands are adopting integrated growth models that blend online and offline experiences. Live streaming, for instance, has emerged as a powerful tool, seamlessly connecting digital and in-store interactions. It offers a more immersive, interactive, and engaging experience, creating new opportunities for innovative business models.
The digital transformation of luxury brands has become a critical focus for businesses aiming to stay competitive. Companies looking to enter the high-end market are encouraged to adopt a dual-channel approach: establishing small but refined physical stores while fostering strong online-offline synergies. This strategy allows diverse consumer groups to explore and purchase luxury products through a variety of touchpoints, ensuring a seamless and enriched customer journey.
