As many as 72% of respondents said they were paying the same or more for a luxury car, while 62% were paying the same or more for luxury watches and jewelry. In addition, almost 20% of respondents indicated they were actually planning on upgrading the class of their hotel on their vacation this year.
“Asia is one of the fastest growing regions in the world today, and there has been an increase in the number of affluent consumers in the region. This segment of consumers is extremely important as their spending is, for the most part, recession- proof. Companies that are seeking continued and sustainable growth cannot ignore this region or this consumer segment,” said Amrita Banta, Managing Partner, Agility Research & Strategy.
A total of 5,952 respondents from China, Hong Kong, India, Singapore, Indonesia and Malaysia participated in the Agility Luxe Poll conducted online by Agility Research & Strategy in March 2012.
On average, less than 25% of respondents in China and Hong Kong were willing to reduce their spending on luxury items this year. This contrasts with Malaysia, where 49% of respondents were willing to reduce their luxury spending, as well as countries like Singapore (34%), India (40%) and Indonesia (39%).
Not All Luxury Products Are Created Equal
Not all luxury products are created equal. What traits a luxury product is associated with impacts whether it becomes considered a recession-proof expense or not. A trait like quality implies something that endures, while traits like trendy, popular and indulgent imply an extravagance that could be seen as fleeting.
Across markets, gadgets (49%) were most associated with quality, followed by cars (44%) and hotels (41%). Buyers of products in these categories can rationalize expenses by convincing themselves that they are fulfilling a functional need and are paying for quality that is essential in terms of safety or durability. The same can be said for hotels, where higher rates are often synonymous with a higher grade of cleanliness and safety.
On the other hand, for other categories of products, different criteria take center stage. Marketers need to take note that the line gets blurred when a luxury item or experience is seen as an extra in life one can do without, with no compelling justification for the expense. Luxury holiday destinations are strongly defined as being popular (30%) and indulgent (41%). When it comes to fashion, trendy (41%) trumps quality.
“Moving forward it will be important for marketers to keep the core values of Asian consumers at the top of their minds – and give them a reason to buy without guilt. At Agility, we have over 30 years’ combined experience in the luxury and affluent market and have developed proprietary tools and digital solutions which help our clients understand this lucrative consumer base,” said Asha Choksi, Managing Partner, Agility Research & Strategy. “We are very excited about the opportunity to lead this pioneering work and be at the forefront of the evolving luxury and affluent market in Asia.”