China starts to look for luxury closer to home
The growing power of the Chinese consumer might have the world in its thrall but it seems it won’t be too long before their lust for luxury is more satisfied a little closer to home.
Traditionally, Chinese shoppers have had to head overseas to pick up the latest fashions or other luxury items, due mainly to steep taxes on such items back home. A recent survey by the World Luxury Association claimed that 72 percent of Chinese consumers believed that luxury goods were cheaper overseas than at home, while 69 percent of those polled traveled simply because they had a wider choice of goods available to them when they did.
But another new survey predicts all this is about to change.
American business research and consulting firm Frost & Sullivan has predicted that by 2015, Chinese consumers will be buying 55 percent of their luxury items in China itself, as compared to the 48 percent bought locally last year. As recently as 2006, China was only buying 40 per cent of its luxury items at home.
The main reason, the company claims, is that China is widely expected to lower its taxes on designer goods this year, a move which in turn is expected to encourage even more spending.
Purchases of luxury items in China amounted for some 100 billion yuan (12 billion euros) in spending last year, according to the business consultancy firm Bain & Co. That figure accounts for a year-on-year rise of 25 percent and is one that is expected to rise to 180 billion yuan (21.7 billion euros) by 2015.
Meanwhile, Frost & Sullivan reports that the main items desired by the Chinese luxury brand consumer while at home were designer handbags and leather accessories, which accounted for 14 billion yuan (1.7 billion euros) and 12 billion yuan (1.5 billion euros) in sales in 2010, rises of 30 percent and 37 percent since 2006, respectively.
There are expected by 2015 to be 54 million “wealthy” Chinese – meaning those with a disposable income of more than 100,000 yuan (12,000 euros) – a rise from the 21.7 million enumerated in 2010.