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    Why 47% Of Global Luxury Consumption Falls In China?

    2014/11/8 21:59:00 27

    LuxuryConsumptionChina

    In the context of the slowdown in global luxury consumption due to the economic downturn, mainland Chinese consumers bought nearly half of the world's luxury goods last year, and over 70% of them were offshore consumption. Experts believe that the increasing consumption ability of Chinese people and the rapid growth of overseas tourism have led to the luxury consumption boom. However, with the growing maturity of Chinese consumer psychology, overseas luxury consumption will be cooling down in the future.

      Chinese buy the world's 47% luxury

       China The Research Institute of wealth market, the wealth Quality Research Institute, recently released a report which shows that Chinese consumers spend 1508 euros per capita and the consumption capacity is the highest in the world, which is 3-5 times the average per capita consumption of overseas citizens in many European and American countries. In 2013, the Chinese bought 47% of the world's luxury goods, about 102 billion dollars, of which only 28 billion dollars of consumption remained in China, and overseas consumption amounted to 73%.

    As the number of outbound people has increased year by year, the Chinese have begun to release consumption power worldwide and become the global tourist retail market, especially the largest buyer of the tax-free market. From the data released by the top ten tax-free group in 2013, it can be seen that sales growth of the main tax-free groups is good, and many companies maintain a double-digit growth. Of them, the sales of DFS to 4 billion 65 million euros are the first in the global tax exempt industry, an increase of 25% over 2012. This is due to the huge consumption groups and strong consumption power of tourists from Asia, especially the mainland of China.

    The report predicts that Chinese luxury goods consumption will shift further overseas in 2014. Hong Kong and Macao (30%), Europe (22%) and the United States (21%) are the three most important overseas buyers of luxury goods in China. Meanwhile, the proportion of Chinese consumers buying luxury goods in China decreased by 2% compared with that in 2013, while Hong Kong and Macao decreased by 14%.

        Abroad The advantage of "low quality and high quality" is obvious.

    With the rapid growth of China's economy, the wealth of Chinese people is constantly accumulating, and the consumption power is constantly increasing. The consumption demand for luxury goods is growing.

    "China has more than 1 billion 300 million people, and consumers who are active in the luxury market now have about 75 million. Even a small increase in wealth and spending can have a big impact." Elwan Lenburg, head of HSBC consumer and retail research department, thinks that luxury consumption is not only related to GDP growth and fiscal policy, but also to social and cultural trends. Because of this, very rich countries do not necessarily spend a lot of money on luxury goods. In many Western cultures, showing off wealth is considered improper. In contrast, the Chinese show their wealth is considered "appropriate".

    In recent years, as the proportion of Chinese outbound travel has increased significantly, luxury goods abroad have the advantage of "low price and high quality", which has led to a blowout of overseas luxury goods consumption.

    "Luxury brand has experienced nearly 20 years of development in China, and has already laid a broad sales network in China, but it has not provided quality service to consumers, and has not provided more competitive product prices based on Chinese consumer demand." Zhou Ting, director of the Institute of wealth and quality analysis, believes that, first of all, some luxury brands in China do not have their services and experience in place, especially when many brands exist price discrimination in China. Secondly, many luxury goods are covered by all channels, so that consumers do not feel Fei Anquan away, so they will prefer to buy high-quality, original luxury goods from their origin. Third, more and more Chinese consumers hope to have more new products and new experiences, compared with foreign choices more diversified.

    Future consumption will tend to reason

    However, the trend of increasing consumption of luxury goods in China is unlikely to continue this year. The global luxury market survey report released by Bain consulting and Italy luxury industry association shows that the consumption growth rate of the mainland's luxury market is 10% in the first 8 months of this year, a significant decrease compared with the same period last year. By the end of this year, sales of luxury goods in mainland China will reach 117 billion 800 million yuan, down 2% from 2013. This is the first negative growth since the start of the survey in 2000.

    In Zhou Ting's view, the main reason for the poor performance of luxury goods in China is the change of consumption demand. The sales volume of luxury goods has been increasing rapidly in China in recent years. It is entirely driven by market demand. With the popularity of the Internet, information is becoming more and more full and transparent. China's emerging consumer groups are gradually maturing, and the demand for fashionable consumer goods has become more rational. At this point, the brand operators did not do well in service and transformation, which led to the subdivision and cooling of the luxury goods market.

    "The trend of Chinese purchasing luxury goods overseas will fade away in the future." Chen Fengying, director of the Institute of world economics of the Institute of modern international relations, believes that when people are rich enough, they will not worship luxury goods so much. When they can buy products that are basically the same price as foreign countries, they will not go abroad to buy them; besides, when China develops to a certain extent, the brand effect of China will also develop, and the fanatical demand for luxury goods in the future may decline and fade away.

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