The Luxury Lingerie Market in China
Basques, brassieres, corselettes, panties, G-strings, stockings and all the naughty undergarments that keep you up at night have been flooding the Chinese lingerie market. But why the sudden boom in the luxury lingerie market in China? According to Angela Doland, “China’s lingerie market, worth more than $20 billion in 2014, has logged double-digit growth annually since 2010.” High-end lingerie made up 30% of the category’s sales last year. With a luxury industry attracting $6 billion in annual sales last year and double-digit growth, it is not surprising that international and local players are taking notice.
According to Angela, “The market has matured, with people willing to splurge on invisible luxuries. Women “started to realize the importance of underwear and were willing to treat themselves better by purchasing premium underwear products with better comfort and design,” said Fangting Sun, research analyst at Euromonitor International.”
Chinese urban middle class women consumers are realizing the importance of underwear and are slowly changing their buying habits. Underwear is changing from an everyday necessity to a luxury offering providing comfort, style, and sensuality. According to Olivier Verot, “Chinese women have the same motivations as western consumers regarding the purchases of underwear: to be sexy and glamorous, to add some value to their bodies and to keep things fresh with their men.”
According to Goldman Sachs, “11% of china’s population can be considered middle class.” This number, plus the growth rate of the luxury lingerie market in China, clearly shows a growing needed to service this market segment. Currently, there are a handful of local and international players, but the market is fragmented with the leader holding around 3-4%. The market is comprised of about 10 top sellers including Beijing Aimer, Cosmo Lady China Holdings Co., Japan’s Wacoal Holdings Corp. and Germany’s Triumph International AG. Other international players include Etam, Implicite, Victoria’s Secret, and Aubade.
Marketing Luxury Lingerie to Chinese Women
According to Jing Daily, “Despite their increasing presence in China, leading international lingerie brands like La Perla have found that introducing high-priced luxury intimates to the country’s consumers is no small task, owing to cultural norms and macro-level consumer trends. Unlike highly visible items such as handbags, footwear or outerwear, more “invisible” luxury goods like lingerie and perfume are still relatively new to logo-loving Chinese consumers looking for public recognition.”
There are many concerns when marketing an intimate product like lingerie in China. Cultural differences and buying behaviors are extremely important when interacting with Chinese consumers. Here are 5 things to consider before entering the luxury lingerie market in China:
E-commerce vs. Retail
Both e-commerce and retail stores have advantages and disadvantages. E-commerce sites like Tmall and JD have massive user bases, extensive distribution networks, and trusted payment services. These benefits make it easier for local and international brands to reach a large consumer base, but the major drawback of e-commerce sites in China is loss of brand equity.
E-commerce sites often remove the intimate shopping experience that retail stores can provide. Smaller brands or unknown brands in the Chinese lingerie market risk losing brand equity by not controlling the shopping experience. E-commerce shopping often becomes commodity shopping when all brands are unknown. Shoppers will compare price and focus less on quality and added brand value.
Retail stores on the other hand provide new brands with a platform to provide superior customer service and help educate new shoppers. This extra care can often lead to repeat customers and loyal shoppers. The major drawbacks are fixed locations and fewer potential customers. Opening a flagship store in Beijing or Shanghai means your brand will only be present in one location in a very big city. If your brand is unknown in China, you will have a hard time attracting new customers; decreasing overall sales and brand reach.
Product sizes and color
Chinese women tend to be slim and petite compared to European or North American women. International lingerie retailers must be aware of the product sizes offered or risk losing first time customers. Along with sizes, which tend to favor A and B cups in bras and smaller sized panties, retailers must be aware of color meanings in China.
According to Olivier, yellow is a pornographic color and it is often avoided by female shoppers, while pinks and reds are considered more acceptable. White is another color to avoid due to its relationship with death and funerals. Other colors should be researched before releasing new lines of lingerie.
Promotional Message / Positioning Strategy
Your positioning strategy will help you determine your promotional channels and pricing strategy. There are a few strategies available to luxury lingerie retailers. These strategies include:
- Sexy/Romantic (affordable or expensive)
- Pure and Innocent (affordable or expensive)
- Everyday Comfort (affordable)
These are not the only positions within the luxury lingerie market in China, but these are the most obvious strategies. Other positions could be a lucrative gift market that targets male shoppers or fetish ware, but these positions within the market are less defined and more niche.
Using the correct promotional channels comes down to desired position within the market. Luxury lingerie can take a few position within the market from everyday ware to sexy/romantic ware or expensive to affordable luxury. Knowing your positioning strategy is key when looking into promotional channels.
Some of the key Channels include:
- Niche Sites
- KOLs using multiple channels
- Video pre-roll (YouKu, IQIYI, SOHO TV, etc.)
- Magazines (ex. 内衣Mode)
Pricing strategies are going to be greatly affected by your positioning strategy. Mentioned previously there are multiple positioning strategies and companies or brands can have multiple lines. According to Global Intimate Ware, “Each person [Chinese consumer] is willing to spend around 300 EURO per year for apparel.” Fanny Zhao, a stylish 25-year-old, while talking to Adage, “guessed she spends $500 a year on brands such as Triumph, a German label.”
The average Chinese luxury lingerie consumer will spend $400 – 500 a year on luxury lingerie, which means pricing strategies must account for this total price range. Pricing your lingerie over $300 – 400 per item will quickly out price your core target audience. Being aware of consumers disposable income will help with your pricing strategy.
Luxury Lingerie Market in China
According to Fibre2Fashion, “Despite the sea [of] changes in the making and marketing of this intimate apparel, [the] purpose of lingerie has not changed; women still want to look appealing. They make women look modish and express an erotic panache. Lingerie is the most beautiful, luxurious, and feminine apparel and is appreciated worldwide for its practicality and comfort.”
The luxury lingerie market in China is currently fractured, growing, and complex, but that also means there is plenty of opportunity for local and foreign retailers to carve out a niche and create a profitable business venture. With double digit growth rates Y-o-Y and more interest in ‘invisible’ luxury, this market segment is expected to boost the global lingerie market over the next few years.