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    Purchasing Disrupts Domestic Market Sales, And China Will Crack Down On Grey Luxury Market.

    2016/4/5 22:09:00 45

    PurchasingMarketLuxury Goods

    In recent years, purchasing has become a daily routine for young people. Everyone likes to buy things on behalf of them, because purchasing prices are relatively cheap, but buying and selling disrupts the price and supply of the domestic market. China will crack down on the gray luxury market.

       China It is hoped that consumers will buy luxury goods in China instead of abroad. According to the latest Reuters news, China began to increase tariffs on overseas orders, and stepped up efforts to crack down on carrying luxury goods in the trunk. In addition, China also strengthened the specification of overseas use of UnionPay cards. Since January, the withdrawal limit of each card on overseas ATM is 100 thousand yuan. Through these measures, China encourages consumers to spend at home and crack down on the gray luxury goods market which evade Customs duties.

    Although Chinese consumers contribute 1/3 of the global luxury goods sales, only 1/5 of the transactions actually took place in mainland China. The rest of the transactions took place overseas, including orders from overseas websites, Chinese travel shopping or overseas purchases.

    This has led to a decrease in the tariff revenue of the Chinese government and is not conducive to local consumption, especially for high quality goods. Taking Beijing as an example, the city has been trying to promote economic import and export balance.

    An economist from HIS Global Insight said: "China wants to re transfer overseas shopping to the mainland, and strive to cultivate the luxury consumer market in the mainland, thus driving the overall consumption economy."

    Although last year, some luxury brands such as Chanel lowered the prices of products in China to reduce the gap, the luxury of the latest Dolce &Gabbana handbags, such as those in Milan or Paris, may be 50% cheaper than that in China.

    Some Chinese want to buy expensive luxury goods abroad, mainly because they have greater confidence in the authenticity of products and can get more product choices and better services in foreign stores.

    A few years ago, luxury brands invested heavily in the Chinese market and opened up more stores, but now these stores have been left idle and damaged brands. According to the data provided by Bain consulting company, the problem has become worse in the past year. In 2015, the consumption power of luxury goods in mainland China decreased by 2%, but the number of Chinese buyers in Japan increased by 251%, the consumption of Chinese buyers in Europe increased by 31%, and that in Korea increased by 33%.

    So far, the weakening of luxury consumption in China has been partly offset by strong overseas consumption of Chinese tourists, especially in Japan and Europe, which will seriously cause domestic shops to fall into the role of exhibition hall.

    Since the end of last year, luxury brand LV has started an integrated branch plan in China. Apart from three places in Beijing, Shanghai and Hangzhou, there will be no more than one branch in other cities. In addition, other luxury brands have followed up LV practices, and have taken off shop or slowed down the launch plan.

    Elle China deputy editor Roth Lai is in Paris this week. Luxury goods Speaking at the meeting, the parallel market, mainly the network market, is squeezing the performance of physical stores.

    Roth Lai said: "e-commerce has become the main driving force for China's luxury market, but in the foreseeable future, the Chinese will shop outside China until one day, China's economic structure has undergone major changes."

    In order to crack down on purchasing agents, the Chinese government increased the penalties for false declarations last week and tightened customs control. The departments concerned will implement more and more stringent measures to check Chinese tourists who are full of luxury goods in the luggage compartment at the airport and impose tariffs on them.

    Since April 8th, Beijing has also announced that it will increase taxes on a series of imported products completed through the Internet or by purchasing. For example. The tax on wrist watches from overseas increased from 30% to 60%, and jewellery increased from 10% to 15%. Exane BNP Paribas analyst Luca Solca revealed: "we expect this will have a negative impact on China's purchasing and tourist consumption."

    A senior developer in Hongkong who specializes in shopping malls in the mainland said last year that some top executives of luxury brands had visited Beijing to discuss how to join the government in combating purchasing. "Luxury brands are not worried about economic slowdown or anti-corruption," the executive said. Taking into account the expansion of the middle class, the level of personal spending is not bad, they are worried about purchasing, because buying and selling disrupts the supply and pricing mechanism of luxury brands.

    Buyers buy products overseas, and then sell them to mainland customers to make profits. They usually avoid customs duties through various channels to save costs. Buying on behalf of One of the main commodities is luxury. A report by Bain, a consultancy, points out that in 2014, the scale of luxury goods purchasing was between 55 billion and 75 billion yuan, almost half of the sales of luxury brand stores in the mainland.


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