What do Cartier and the Michelin Guide have in common? Not much, except that both luxury brands are attracting the attention of millions of millennials in Asia, latest findings from the Julius Baer Wealth Report Asia suggest.
The study showed that millennials have a different spending pattern compared to their parents and grandparents, preferring exclusive experiences and services over luxury goods - and degustation dinners is one such proclivity. They are in fact the most frequent fine-diners in Asia.
‘Millennials have been surveyed to be the generation that loves eating out versus the other generations,’ Pearlyn Wong, executive director for Asia Pacific markets and advisory solutions told Citywire Asia.
In response to this growing trend, Julius Baer included fine dining in its luxury lifestyle index, basing the benchmark prices of the degustation menu at top Michelin starred restaurants in each of the 11 cities surveyed in Asia.
While the Asian appetite for fine food is famous, quantifying and comparing the experiences across cities was a key obstacle to include it in the index, Wong said. But this was solved when Michelin rolled out its restaurant guide in Singapore and Seoul in 2016 and in Shanghai earlier this year. It is expected to launch a Bangkok guide this year.
Hong Kong is the most expensive city for a fine dining experience, with the average cost coming to US$287, followed by Singapore at $283. Mumbai came in the least expensive, at $113. The price of fine dining in Asia as measured by the index has risen by 1.2% year-on-year in US dollar terms with the most significant movements in Bangkok (+17.3%) and Manila (-7.0%).
Asia has over one billion millennials, with China and India each boasting about 400 million, and the report found that targeted marketing can significantly drive their purchases and hence, a brand’s market share. Gucci commands a significant market share of the luxury millennial market - nearly four times that of its competitors, according to Hitwise data - due to edgy fashion and smart use of digital marketing.
‘The second observation is the large market share jump in millennial interest around June 2016 for Versace,’ noted the report. According to Hitwise, this was when the company enlisted superstars Gigi Hadid and Karlie Kloss to model for their fall campaign.
‘[Furthermore] millennials are concerned about getting value for what they spend,’ Wong said, stating that the research showed a preference for mid-to-high-end luxury bags and shoes, rather than super high-end.
Millennial spending patterns induced another change in the Swiss private bank’s lifestyle index, which comprises 22 luxury goods and services – a switch from Tiffany solitaire diamond ring to the Cartier love bracelet.
‘Symbolism is quite important to them. That’s why we’ve introduced the Cartier love bracelet,’ said Wong. ‘This is something wealthy millennials have found interesting. Tiffany is less symbolic as an item.’
The bracelet can only be removed using a special tiny screwdriver, hinting at permanency, and was the most googled jewellery item on the internet in 2016.
‘Millennials in particular are attracted to trendy designs and regard the styles of their jewellery as an avenue to showcase their individuality. These trends are driving falling sales for several quarters in a row for high-end jewellers such as Tiffany,’ the report said.
On the other hand, Asian jewellers such as Chow Tai Fook and Luk Fook Holdings are taking the lead to roll out innovative products and edgy designs.
‘Over time our basket could reflect more experiential luxury goods as opposed to personal luxury goods. We were thinking about looking at how much it would cost to rent a yacht, for example, this year. Also, a travel item that’s more curated versus free and easy,’ Wong said