China, Socialism & Consumer Behavior: Shoppers go abroad for luxury bargains
Chinese consumers spent about US$7.2 billion on luxury goods overseas during the week-long Spring Festival holiday, a 28.6 percent jump year-on-year, according to a survey.
Europe remained the top destination for luxury shopping during the holiday with a 46 percent market share. Chinese tourists accounted for 62 percent of its luxury sales, a rise of 12 percent year-on-year, according to the World Luxury Association.
Hong Kong, Macau and Taiwan took a 35 percent market share with customers from the Chinese mainland responsible for 69 percent of their sales. North America took the remaining 19 percent share with Chinese travelers contributing a third of its sales.
The association said Chinese consumers were the biggest luxury buying force during the holiday with watches, leather goods, fashion clothes and cosmetics topping their shopping lists. Last year, they spent US$12.6 billion on luxury products, excluding private jets, yachts and cars, representing 28 percent of the global figure.
Meanwhile, luxury spending on the Chinese mainland stood at just US$1.75 billion, mostly in Shanghai and Beijing.
Up to 72 percent of survey participants said they were attracted by cheaper prices outside the mainland. The association acknowledged in a report last June that there was a yawning gap between prices on the Chinese mainland and elsewhere because of import tariffs and consumption taxes, which can make luxury goods 72 percent more expensive on the Chinese mainland than in France, for example.
However, 69 percent of survey participants said that what attracted them to buy was the wider range of offers outside the mainland while 45 percent said they enjoyed the better service.
Mandarin-speaking salespeople are now common in shops on New York’s Fifth Avenue or the Champs-Elysees in Paris.
Some countries have begun to look seriously at China’s consumption power as a driving force for their tourism and retail sectors. The United States is increasing tourist visas for Chinese mainland residents by 40 percent this year and streamlining the application process.
Despite the lavish spending overseas emboldened by the appreciation of yuan, China’s luxury sales may have increased by 25-30 percent in 2011, Bain & Co predicted in a report in December/2011. All the big names are extending their presence across the country, it said, but a soft landing in consumption in the fourth quarter could make them more cautious this year