Most Luxury Goods In China Have Been Cut Down, And The Number Of Stores Has Declined.

China is the largest luxury goods buyer in the world, and luxury goods sales in mainland China have declined again since 2015, the first negative growth in 8 years since 2014.

Yesterday, the global management consulting firm Bain consulting released the 2015 annual report on China's luxury goods market (the "report"), showing that men's clothing, watches, accessories, luggage and bags all fell sharply.

Luxury consumption in the mainland dropped by 2%

In 2015, Chinese consumers were still keen on luxury consumption, and the heat from overseas purchases continued to rise.

The report shows that the growth of outbound travel and the dependence and trust of Chinese shoppers on B2C overseas websites have stimulated the development of offshore outsourcing, which has led to the overall decline of China's luxury goods market.

In 2015, the scale of China's luxury goods market was 113 billion yuan, down 2% from 2014, while 2014's first decline in recent years was 1%.

Among the major decline categories,

And watches continued to fall.

Among them, men's clothing fell 12%, watches fell 10%, accessories fell 6%, luggage dropped 5%.

Contrary to the decline in domestic luxury consumption, Chinese luxury goods in 2015 increased by 10% overall.

It is worth noting that consumers have changed a lot in the choice of luxury shopping places. Consumers have flocked to Japan to spend more than 200% of their purchases.

The advantages of exchange rate and competitive luxury pricing make Korea, Europe and Australia become the popular shopping places of Chinese consumers in 2015.

By contrast, luxury consumption in mainland China has dropped by about 25% in China's Hongkong and Macao, China.

Multiple factors reduce purchasing scale

In 2015, the outbound travel of Chinese consumers increased by 32% over the same period last year. With the increasing popularity of overseas tourism, consumers' dependence on purchasing agents, namely, overseas personal shoppers or professional institutions for Chinese domestic customers to purchase and mail luxury goods, has gradually decreased.

As a 2014 purchase

As one of the main channels, the scale of purchasing was reduced to 43 billion yuan in 2015.

Bain analyzed several reasons for this phenomenon, including the price adjustment of the major luxury brands, which led to a decline in the profits of purchasing agents. The government strengthened supervision over the import channels including purchasing agents, weakened the renminbi and other shopping channels, especially the rise of cross-border e-commerce and overseas shopping websites.

The report points out that cross-border e-commerce and overseas websites are becoming more and more popular as luxury shopping channels. About half of the respondents said they bought luxury goods through these websites last year.

Most luxury goods are removed from stores.

The fall in domestic sales will inevitably lead to the reduction of the number of stores by most luxury brands, and more attention should be placed on a few larger and better location stores.

The report shows that GUCCI has closed 5 stores, and Burberry has closed 2 stores.

It closed 6 stores, and Prada closed 4 stores.

Many brands realize that they need to find the brand uniqueness that is blurred by excessive expansion.

A brand leader said, "for the company, there are only 1 stores in the city, and there are 2 to 3 stores in the city. We need to adhere to this standard, and seriously think about where we need to shop and how much exposure we need in these places".

"Although there are many macroeconomic, economic and industrial challenges in the Chinese market, this does not mean that there is little hope for luxury brands," said Bruno, a global partner of Bain. "A lot of growth opportunities for brands will come from more unique and fashionable brand series, digital platform interaction, digital content creation, and pricing that encourages Chinese consumers to consume locally."