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Chinese Consumers Drive Luxury Retail Growth in Canada: Study

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A new study conducted by market research firm Vivintel, the custom research arm of Vividata, has found that nearly 1.2 million Chinese consumers (aged 18 and over) in Canada account for $61 billion in self-reported consumer spending.

“With the growing number of Chinese living, working and studying in Canada, the need to understand this consumer segment is of significant importance to Canadian marketers, particularly with regards to luxury brands. We are excited to be launching this new ethnicity study which will help marketers understand what is driving consumption and enable them to better influence media buying decisions amongst this consumer group,” said Pat Pellegrini, President and CEO of Vividata, a consumer and media research company.

YORKDALE SHOPPING CENTRE IN TORONTO. PHOTO: OXFORD PROPERTIES

“Our numbers are affirmation for many of the trends and assumptions and beliefs that were held by agencies and media planners and buyers (in Vancouver) working with the Chinese. I believe we have captured the audience we were looking for, the consumer we were looking for, in a syndicated way so that everybody could benefit.”

PHOTO: CANADA GOOSE, YORKDALE

Some of the key findings in the ‘Ethnicity Study: Insights into the Chinese Consumer’ are:

  • One in three Chinese consumers in Canada agree with the statement, ‘I buy luxury brands to feel different from the rest of society’. This is even more so the case with Chinese international students, of which there are nearly 70,000 in Canada, who indicate an even greater affinity to luxury brands than the general Chinese population;

  • 40 per cent of Chinese consumers in Canada report that they “prefer to drive a luxury vehicle”. This is most noticeably the case among those in Canada on a temporary work permit; 52 per cent of those on a temporary work permit prefer the same; and

  • There are roughly 490,000 Chinese consumers in Canada that are not Canadian citizens and were not born in Canada. 53 per cent of this consumer segment report that they pay more attention to advertising in their own ethnic language.

PHOTO: REDDIT

“We can see some differences between Vancouver and Toronto Chinese. Vancouver had more people coming from Hong Kong in the past than mainland China and now kind of switching back around. I think that’s less though in Toronto,” said Pellegrini.

“It’s a very powerful consumer group. They don’t react to the market. They shape the market. When you see the differences between the buying power that they have, their preference for luxury brand, the amount of spend that they do in the first few years of moving into Canada, it’s got a huge impact.”

745 THURLOW STREET IN VANCOUVER. PHOTO: LEE RIVETT

Vivintel surveyed just over 2,500 respondents (aged 18 and over) residing in Toronto and Vancouver who identified as being of Chinese origin.

“We often fall into a hole when talking about the Chinese Canadian consumer,” said Sonny Wong, President and Creative Director of Hamazaki Wong Marketing Group. “We tend to lump the Chinese government and Chinese consumers into the same pile, preventing us from making the rational marketing decisions we make for other consumer segments. A study of this depth and calibre will allow marketers to better understand the Chinese population in Canada and create more relevant marketing strategies and targeted campaigns.”

PHOTO: DIGITAL COMMERCE 360

“Historically, there has been a major gap within the industry for research that looks into the ethnic consumer market, specifically around media habits and buying patterns. Chinese consumers are an increasingly significant part of the Canadian population, making a syndicated study like this long overdue. Vividata’s study into Chinese consumers in Canada will provide us with the insights we’ve been missing to effectively target this group,” said Chris Herlihey, VP, Analytics and Insights, IPG Mediabrands.

THE CARLYLE LUXURY COMPLEX ON ALBERNI STREET IN VANCOUVER. PHOTO: LEE & ASSOCIATES

Whether the Chinese consumer becomes an even larger part of the Canadian retail market share in the future is up in the air due to a number of political and trade factors currently in play.

“The relationships now with China and Canada, and even the United States, there is a dynamic that may see immigrants and obviously spending power from mainland China perhaps slowing down and maybe a new small bump of repatriated citizens from Hong Kong,” said Pellegrini. “So they were from Hong Kong, became Canadian citizens, went back to Hong Kong and now with the turmoil in Hong Kong, deciding to maybe come back.” Pellegrini said the Chinese consumer has a strong preference for luxury brands.

For example, he described Vancouver as the “luxury car capital of North America.”

“Wherever there is a significant proportion of international students you are going to see an impact on sale of luxury brands – not just automobiles,” he said.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior National Business Journalist with Retail Insider in addition to working on his own as a freelance writer and consultant in communications and media relations/training.

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