China, Socialism & Consumer Behavior: Rising cost of luxury goods slows to 2009 level
Price increases for luxury goods and services in China this year are at their slowest level since 2009 but continue to outpace inflation, according to a report by the Hurun Research Institute.
China’s Luxury Consumer Price Index, which measures price changes in 62 luxury items, rose 4.94 percent in June from a year earlier, 2.79 percentage points lower than the increase in the same period last year.
The institute said the recent economic slowdown had “knocked the confidence of the Chinese luxury consumers” and made luxury brands cautious about raising prices.
China’s corruption fight may also have contributed to the slowdown.
In March/2012, Premier Wen Jiabao pledged to ban the use of public funds for luxury items including the Moutai liquor that retails for about US$300 per standard bottle.
In late July, Tianjin, a bustling port city near Beijing, reported Moutai sales were down by as much as 50 percent over the previous six months, according to Reuters.
The overall rise was 2.74 percentage points higher than June/2012 inflation rate. The Luxury CPI has outstripped inflation over the past six years, Hurun said.
The products in Hurun’s luxury basket include education, jets and yachts, cars, drinks, property, travel, watches and jewelry.
Travel costs jumped the most, by 11.92 percent, 7.82 percentage points higher than last year.
A one-night stay in the presidential suite of The Peninsula Hotel Hong Kong soared 34.47 percent to 80,360 yuan (US$12,657).
Prices for alcohol, cigars and cigarettes grew at 7.84 percent compared with last year’s 9.2 percent increase.
Among Chinese rice liquors, Shuijingfang Classical Collection overtook Moutai as the biggest riser, with a 58.98 percent price increase, to 1,399 yuan.
Top education fees were up 7.58 percent, almost the same as last year.
The private jet and yacht market consolidated with a moderate 2.14 percent increase following a 20.11 percent surge last year.
Luxury car prices rose just 0.72 percent, slowing from last year’s 1.54 percent growth.
Prices of upscale properties shed 2.42 percent this year after stricter measures were introduced to curb speculation