12Key outputsSample sizeTencent x BCG luxury consumer group insight studyTencent AMS platform Tencent platform users survey responsesChinese consumers interested in luxury goods1,500 consumers (true- luxury buyers in past 12 months)True- luxury consumer group profile and digital behaviorLuxury touchpoints and purchase pathway; category differencesInsight sourceTencent insight Consumer survey3 Copyright ©2019byBostonConsulting Group.All rights reserved.Backup: This report focuses on the true- luxury categories listed below, and excludes accessible luxury, fragrances and cosmeticsPersonal luxury goodsCategory Sub-category Threshold price1. Handbags 1 Handbags >1,000 each2. Shoes 2 Shoes >350 each3. Accessories 3.1 Sunglasses >180 each3.2 Scarves/small leather goods >180 each4. Ready to wear 4.1 Outerwear/ coats >1,400 each4.2 Dresses >1,200 each4.3 Suits >1,600 each4.4 Sweaters / knitwear >400 each4.5 Shirts / Topwear >200 each4.6 Jeans / pants / skirts >250 each5. Watches 5 Watches >2,000 each6. Jewelry 6 Jewelry >1,200 each4 Copyright ©2019byBostonConsulting Group.All rights reserved.Contents01. Insights into Chinas true- luxury consumer02. Technology ecosystems re-shaping luxury marketing in China03. New capabilities, new beginning5 Copyright ©2019byBostonConsulting Group.All rights reserved.In 2018 Chinas luxury market exceeded 110 B, 33% of the global market, and is growing at 6%Note: Including purchases abroad; Including leather accessories, apparel, watches and jewelry, fragrances and cosmeticsSource: BCG Luxury Market Model Chinese personal luxury market maintains 5-6% growth CAGRTrue luxury Accessible luxury69%73%27% 28%9828%73%201572%2016 201728%72%201832%2025F95 105111157-164+4%+5-6% B, retail value222241334164(41%)111(33%)Rest of world2018 2025FChina40574% of global growthChina will contribute 41% of global luxury consumption by 2025 B, retail value6 Copyright ©2019byBostonConsulting Group.All rights reserved.Among true- luxury goods, ready-to-wear, watches 2. true luxury only, excluding perfumes and cosmeticsSource: BCG X Tencent Luxury Study, 2019Purchase penetration among luxury consumers1（ %）4261 5044 5424%Shoes6Ready-to-wear23%Total 2Watches the rest 27% are widely dispersed in over 2,000 lower tier citiesChinese true- luxury consumers can be classified into 9 segments. Absolute luxurer, Megacitier and Rich Upstarter represent the 3 largest segments; collectively they contribute 46% of salesThe path to purchase happens digitally. On average, 60% of the 4-5 touchpoints before final purchase are online; for handbags, the number of digital touch points for handbags is as high as 6-7Social media influence remains strong: 50% of consumers are influenced via the WeChat ecosystem; Chinese consumers prefer a highly curated, personalized social experienceKOL is a key influence on consumers aged below 30; KOLs are becoming more diverse in their online personalities and their contents older consumers core for handbags and watches & jewelry11. Percentage of those who purchased the category in the past 12 monthsSource: BCG X Tencent Luxury Study, 20192018 average spend and purchase penetrationby category and by age4.05.75.97.39.74.04.44.54.75.531-3518-2526-3036-4040+2.72.93.74.24.44.56.36.26.05.65.05.03.32.82.85757666459Penetration12945523949Penetration3044494332Penetration5653545358Penetration5149515343PenetrationHandbagsReady-to-wear ShoesWatches & jewelry AccessoriesAnnual avg. spend (,K)10 Copyright ©2019byBostonConsulting Group.All rights reserved.12018 true-luxury market size by category and age ( , B)Source: BCG X Tencent Luxury Study, 20190.8(13%)1.0(15%)0.5(9%)1.0(25%)6.026-300.9(14%)2.0(33%)0.7(18%)0.5(8%)2.2(37%)2.1(32%)Watches &jewelry0.5(8%)1.8(31%)2.0(33%)0.6(14%)2.0(30%)1.0(17%)1.0(24%)0.6(11%)0.8(18%)Handbags31-35Ready-to-wear0.4(10%)6.00.9(20%)0.6(14%)Accessories1.3(33%)0.7(10%)6.6Shoes18-2536-4040+4.4 4.11.1(24%)26-35 y.o. the core customers of watches & jewelry and handbags, consumption for other categories are evenly distributed among age groups