The luxury goods market in Asia is projected to reach $166,31 billion by 2028 with a CAGR of 3,90%, whereas luxury retail is set to touch new levels with a CAGR higher than 7% till 2027. The market is suffering from various global headwinds such as decelerating growth, huge interest rates, and political tension in geographic regions such as Japan, Korea, and China, known to be the largest marketplace in the region. However, the consumers’ spending power and confidence to buy luxury goods are still intact.

According to The Drum, 80% of the APAC consumers want the brands to communicate and connect with them in a personal way. 40% of them prefer the brands to be more aligned with their own values. Each market had a huge impact on the global luxury goods volume in 2023. China had a rigid local demand and revived version of tourism. Japan’s fragile currency value helped for higher tourist flow along with a strong demand for luxury products. South Korea had a rough year but there was a positive result from other countries.

Personalization in Offline and Online

Integrate the shopping experience in real life and digital space with an engaging, memorable, and emotional journey in retail by working data analysis to personalize the customer experience. The brands have to work on each touchpoint, including awareness, consideration, and after-sales activities, at every channel. They should provide a customized journey driven by analyzing customer data and segmenting them based on behaviors, status, and lifestyles.

There should be no hesitation in investing in creative and immersive store design and technologies that can be incorporated into it such as AI, BOPIS (Buy Online, Pick Up in-store), and mobile POS channels. It provides an inclusive retail face. AI and chatbots can help in making E-commerce more conversational and in improving customer services.

Sephora has its first-ever ‘store of the future’ in Singapore. It has sales staff who can access the customer history, loyalty program details, and the product’s supply chain information through the mobile POS system. Jins from Japan launched AI-driven mirrors in its stores along with virtual try-ons in its online platform to assist customers in choosing the perfect frame which will then be created through 3D-printing.

Localizing the Business

APAC customers are proud of their local craftsmanship and want to support domestic businesses first. This allows the brands to show their acknowledgment and support towards the local traditions and culture, which included marginalized communities, grassroots movements, and other initiatives.

Brands can recognize a hyperlocal phenomenon by working on their product and store designs along with launching a crafted campaign. They can collaborate with local influencers, opinion leaders, and craftsmen to capture the phenomenon correctly and avoid any issues through misinterpretation. Another strategy to focus on is being inclusive of human colors, shapes, and sizes by studying the local regional people and their preferences.

Loewe invested in a monochromatic ceramic program organized at Jingdezhen Ceramic University in order to launch its Chinese Monochrome Collection. Prada opened the Prada Mode in South Korea, featuring performances, screenings, and talks to promote Korean artists, chefs, and curation at the time of Frieze Seoul. Dior hosted the pre-Fall 2023 show in India by looping the local craftsmen in to work on the collection. It partnered with the Chanakya School of embroidery in Mumbai, organized by Karishma Swali, for the embroidery works in the collection.

Premium Experience in Lifestyle

As Asian consumers prefer being at home, in nature, or any other life-conscious social event due to the permacrisis (overwhelmed by the current negative state of the world), luxury brands can offer them an escape by providing them with a relaxing and leisurely experience.

They can surprise them with a premium experience, instead of just focusing on selling products, to enhance their relationship with the customers. To do that, it is crucial to study the challenges faced by the customers and what are the things that they want to get away from by getting in touch with them through the stores, customer services in-store, pop-up strategies, and online communication. The people from tier 1 and 2 cities prefer to have urban outdoor activities and wellness programs to break away from their stressed lives. Collaborating with brands who are like-minded and other collaborators to introduce an experience with multi-dimensional touchpoints is another option.

Louis Vuitton presented Pharrell Williams's pre-fall 2024 show in Hong Kong. Dior worked on giving an escaping journey for the customers of China transporting them to a winter wonderland in 2022 - it featured a Paris-inspired sculpture at the Jilin ski resort - and to a summer college campus in 2023 at the Zhang Garden, Shanghai. Luxury skincare labels like La Mer, La Prairie, and Guerlain are collaborating with luxury hotels to provide a premium spa experience.

Transparency with Customers

According to Marketing Interactive, 59% of APAC luxury customers are stating that the brands’ lack of transparency when it comes to sustainability is one of the biggest reasons for them to avoid those brands. Hence, it is important for them to be more up-front. They can work on greenvertising by prioritizing social and ecological contributions to the particular region and aligning their purposes to be coherent with the locals.

One can work on obtaining a trusted third-party accreditation like B Corp Certification to back up their compliance with the rules and regulations of the region. The ideal way to win this strategy is to be open with the customers, responsive to their questions on the environmental and social impacts of the products, and utilize the feedback to improve.

Minimalist has listed the ingredients used in its products along with their concentrations and purposes. Since 1976, the Rolex Awards has been offering grants to many environmental and social players. This initiative has supported various events in APAC such as biodiversity conservation in Nepal, India’s rainforest protection, and rainwater collection in Japan.

Cover image: Dior's Paris-inspired sculpture at the Jilin ski resort, courtesy Dao Insights.