Affluent Asians Redefining Luxury


Luxury consumers vary in their choices and behaviour across the world. Agility Research & Strategy proves through well-surveyed findings, and gives the top 10 brands preferred by India, China, Singapore and Indonesia

By: Philip Tiongson and Prashant Saxena, Agility Research & Strategy

Posted on: October 16, 2012

Luxury consumers vary in their choices and behaviour across the world. Agility Research & Strategy proves through well-surveyed findings, and gives the top brands preferred by India, China, Singapore and Indonesia.

With the rising prominence of Asia as a region of economic growth, affluent Asians are the prime target of brand managers. While affluent Asians have been cautiously optimistic this year, they have been splurging on their favourite brands and redefining what constitutes luxury. So how do these consumers define luxury and what are the brands that get their share of wallet?

This September, Agility Research & Strategy studied the luxury preferences of 2500 consumers across China, India, Indonesia and Singapore to put together a syndicated research piece – Agility Affluent Ignite™ 2012. The consumers represent online population of these countries and are spread across various age-groups (15-64 years), professions (executives to entrepreneurs), and income levels. Historically, we have observed a high correlation between online presence and affluence. In this study, we asked six key questions that tested the responses on six different attributes of luxury – self-definition, need for uniqueness, perceived quality, exclusivity, social identification and self-rewarding behaviour.

These attributes have been closely associated with luxury and have been tested thoroughly in academic literature. Selected components from the corresponding psychological scales fed into the questions we asked. Respondents then had to select the top three statements that define luxury for them and pick their top luxury brands from a list of two-hundred and fifty brands across apparel, watches, technology, gadgets, automobiles, holiday destinations, hotels, financial service institutions and liquor/alcoholic beverages.

Defining luxury
The Asian affluent consumer defines luxury under four major themes – need for uniqueness, defining oneself, quality – innate or derived (i.e. perceived) along with exclusivity by scarcity and self-gifting via social identification.

The Asian consumer works hard and shops hard. He/she is about 30 years and is enamoured by gadgets, cars and holidays outside their respective countries. Our syndicated research (Agility Affluent Insights), published in April 2012, aimed at understanding how affluent Asians spend and would like to spend their money. About 70 per cent of affluent Asians are willing to maintain their spending in these categories. Indians, Indonesians and Malaysians are especially fond of gadgets and cars while the Chinese are spending more on fashion and accessories. Singaporeans and Hong Kongers are high on vacations.

Top-ten brands in India
Affluent Indians love Apple, Taj, Sony, Intel and Paris (as holiday destination) among various luxury brands that they buy/experience.



 

Interestingly, we also observed a gender war here. While Apple is consistently voted as the most preferred brand across males and females, names like Singapore (as a holiday destination) and ICICI Bank figured in the top ten luxury brands among affluent women. None of these made it to the top-ten. Men preferred brands like Mercedes Benz and Ferrari (automobile), State Bank of India (financial services) and New York City (as a holiday destination) and voted for them more strongly than women. Lack of resonance between the genders resulted in none of these brands making it to the top-ten rankings.



 

We also noticed a discrepancy in the definition of luxury in India since brands like ICICI, Microsoft, State Bank of India, which are not traditionally considered luxury, figure in this list

The country war
We understand that luxury isn’t a universal phenomenon and consumer preferences vary across different countries. However, certain countries exert their domination more strongly than others. China and India successfully do it yet again. Six out of top-ten preferred luxury brands across China and India figure in the overall rankings while for Indonesia it’s an even split. Singapore, being a relatively mature market has seven different brands that do not make it to the Affluent Index. This pattern indicates the rise of China and India as the decision-makers of luxury’s future consumption patterns.



Capturing the essence of these findings, Amrita Banta, Managing Director of Agility Research & Strategy, said, “Asia is affluent and diverse. And affluent Indian consumers are playing a big role in changing the patterns within luxury space.”

Philip Tiongson and Prashant Saxena are director and associate director at Agility Research & Strategy respectively. With 30 years of combined experience in the luxury market, the team at Agility Research & Strategy helps clients gain valuable insights on the affluent segment across verticals. Through the years they have developed expertise on how to best tap into this target audience for clients. For more information, visit www.agility-research.com/luxe or email at ContactUs@Agility-Research.Com

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