third eye
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The Chinese have an amazing appetite for luxury high end stuff, even in lesser know cities the amount & kind of High end item show rooms is amazing and the foot fall in these showrooms is very high.
Maybe some Chinese member will validate this - the Chinese are huge spenders and I have often been told by those I interact with, they travel to SE Asia for things like watches etc - they are cheaper there.
Luxury in China loses lustre as wealthy flee - Khaleej Times
woman shops in a Louis Vuitton store during Vogue's 4th Fashion's Night Out: Shopping Night with Celebrities in downtown Shanghai in this file photograph.
Wealthy Chinese are likely to buy fewer luxury goods again this year after the steepest cut-back on spending in at least five years, changing the game for high-end retailers like Louis Vuitton which have staked their growth on China.
Overall spending by wealthy Chinese fell by 15 per cent in 2013, the third consecutive year of decline, according to a survey by the Hurun Report. Spending on gifts in particular also declined by a quarter.
The drop coincides with a government crackdown on corruption and gifting, as well as an a growing penchant for travelling and shopping overseas to circumvent Chinese consumption taxes on luxury goods as high as 40 per cent.
The shrinking ranks of wealthy residents in China has also reduced luxury spending. One in three so-called high net worth individuals have already left, or are planning to leave, the country, the report showed, mostly to seek better opportunities for their children’s education.
Chinese are the top consumers of luxury goods globally. A slowdown in their spending, or a change in shopping habits, would hurt high-end retailers already struggling with a weaker Chinese economy and a more sophisticated clientele that has moved away from logo-branded goods.
Luxury group Richemont, the maker of high-end IWC watches and Cartier jewellery, reported this week slower-than-expected sales growth in the third quarter, largely due to weaker Asian demand.
LVMH, the world’s biggest luxury goods group, has also seen sales growth slow last year as Chinese demand cooled, prompting the company, and brands from rival Kering SA to offer goods with more discreet logos and in expensive materials.
“In terms of traditional luxury - leathers, accessories, watches - this year is going to be flat if not a little bit down,” Hurun Report founder and chief researcher Rupert Hoogewerf told Reuters.
“For luxuries like tea, healthcare, even education, we are still looking at a booming market.”
The crackdown on conspicuous spending, which began in 2012, is part of a vow made by Chinese President Xi Jinping to be tougher on graft. He has focused in particular on gifts made to government officials often in exchange for preferential treatment or contracts.
As a result, many wealthy Chinese now buy luxury goods for themselves, rather than as gifts, Hoogewerf said.
Products by Hermes, Chanel, LVMH’s Louis Vuitton brand, Apple Inc and Gucci remained among the most sought-after brands for gifting, the survey showed.
Less popular were Bulgari - another LVMH brand - Salvatore Ferragamo, Tiffany and Co and the fiery baijiu liquor made by Chinese firm Kweichow Moutai Co Ltd, once the top tipple of Communist Party officials.
Savvier consumers
Affluent Chinese often shop online for the best price globally. They have also become more confident about their fashion choices, mixing high-street clothing and accessories with branded goods.
“There is a much savvier consumer out there,” Hoogewerf said. “There will be more purchasing done overseas than in China. For a brand that’s global it’s fine.”
Over two-thirds of luxury spending by mainland Chinese was overseas in 2013, a factor that contributed to the United States overtaking China as the world’s fastest growing luxury market, according to a study by consultancy firm Bain & Company released in December.
China’s super-rich are also avid collectors - 70 per cent of wealthy Chinese rank collecting as a hobby - but what they are coveting is changing.
Ancient calligraphy last year surpassed luxury watches as the most-collected, knocking watches out of the No. 1 spot for the first time in five years, the Hurun report showed, which could mean revenue losses for top watch makers but a boon for auctioneers.
Patek Philippe remained the most popular watch brand for collectors for the seventh year running while Christie’s was the top ranked foreign auction house, the report showed.
Besides spending less at home, more rich Chinese are leaving the country. The number of wealthy Chinese who have emigrated or are planning to do so rose to 64 percent from 60 percent in the previous year, the survey said.
Most of those leaving, or planning to, are looking for permanent residency overseas - the United States, Europe and Canada are top picks. Very few want to give up their nationality, perhaps because their outlook for China is improving.
The report showed millionaires’ confidence in China’s economy rose for the first time in five years but those who felt “extremely confident” still accounted for only 31 per cent of those surveyed.
The survey’s results are based on responses from 393 Chinese millionaires, or those with personal wealth of at least 10 million yuan ($1.65 million). The Hurun Research Institute has conducted the survey for the past 10 years.
Maybe some Chinese member will validate this - the Chinese are huge spenders and I have often been told by those I interact with, they travel to SE Asia for things like watches etc - they are cheaper there.
Luxury in China loses lustre as wealthy flee - Khaleej Times
woman shops in a Louis Vuitton store during Vogue's 4th Fashion's Night Out: Shopping Night with Celebrities in downtown Shanghai in this file photograph.
Wealthy Chinese are likely to buy fewer luxury goods again this year after the steepest cut-back on spending in at least five years, changing the game for high-end retailers like Louis Vuitton which have staked their growth on China.
Overall spending by wealthy Chinese fell by 15 per cent in 2013, the third consecutive year of decline, according to a survey by the Hurun Report. Spending on gifts in particular also declined by a quarter.
The drop coincides with a government crackdown on corruption and gifting, as well as an a growing penchant for travelling and shopping overseas to circumvent Chinese consumption taxes on luxury goods as high as 40 per cent.
The shrinking ranks of wealthy residents in China has also reduced luxury spending. One in three so-called high net worth individuals have already left, or are planning to leave, the country, the report showed, mostly to seek better opportunities for their children’s education.
Chinese are the top consumers of luxury goods globally. A slowdown in their spending, or a change in shopping habits, would hurt high-end retailers already struggling with a weaker Chinese economy and a more sophisticated clientele that has moved away from logo-branded goods.
Luxury group Richemont, the maker of high-end IWC watches and Cartier jewellery, reported this week slower-than-expected sales growth in the third quarter, largely due to weaker Asian demand.
LVMH, the world’s biggest luxury goods group, has also seen sales growth slow last year as Chinese demand cooled, prompting the company, and brands from rival Kering SA to offer goods with more discreet logos and in expensive materials.
“In terms of traditional luxury - leathers, accessories, watches - this year is going to be flat if not a little bit down,” Hurun Report founder and chief researcher Rupert Hoogewerf told Reuters.
“For luxuries like tea, healthcare, even education, we are still looking at a booming market.”
The crackdown on conspicuous spending, which began in 2012, is part of a vow made by Chinese President Xi Jinping to be tougher on graft. He has focused in particular on gifts made to government officials often in exchange for preferential treatment or contracts.
As a result, many wealthy Chinese now buy luxury goods for themselves, rather than as gifts, Hoogewerf said.
Products by Hermes, Chanel, LVMH’s Louis Vuitton brand, Apple Inc and Gucci remained among the most sought-after brands for gifting, the survey showed.
Less popular were Bulgari - another LVMH brand - Salvatore Ferragamo, Tiffany and Co and the fiery baijiu liquor made by Chinese firm Kweichow Moutai Co Ltd, once the top tipple of Communist Party officials.
Savvier consumers
Affluent Chinese often shop online for the best price globally. They have also become more confident about their fashion choices, mixing high-street clothing and accessories with branded goods.
“There is a much savvier consumer out there,” Hoogewerf said. “There will be more purchasing done overseas than in China. For a brand that’s global it’s fine.”
Over two-thirds of luxury spending by mainland Chinese was overseas in 2013, a factor that contributed to the United States overtaking China as the world’s fastest growing luxury market, according to a study by consultancy firm Bain & Company released in December.
China’s super-rich are also avid collectors - 70 per cent of wealthy Chinese rank collecting as a hobby - but what they are coveting is changing.
Ancient calligraphy last year surpassed luxury watches as the most-collected, knocking watches out of the No. 1 spot for the first time in five years, the Hurun report showed, which could mean revenue losses for top watch makers but a boon for auctioneers.
Patek Philippe remained the most popular watch brand for collectors for the seventh year running while Christie’s was the top ranked foreign auction house, the report showed.
Besides spending less at home, more rich Chinese are leaving the country. The number of wealthy Chinese who have emigrated or are planning to do so rose to 64 percent from 60 percent in the previous year, the survey said.
Most of those leaving, or planning to, are looking for permanent residency overseas - the United States, Europe and Canada are top picks. Very few want to give up their nationality, perhaps because their outlook for China is improving.
The report showed millionaires’ confidence in China’s economy rose for the first time in five years but those who felt “extremely confident” still accounted for only 31 per cent of those surveyed.
The survey’s results are based on responses from 393 Chinese millionaires, or those with personal wealth of at least 10 million yuan ($1.65 million). The Hurun Research Institute has conducted the survey for the past 10 years.
