2013 Chinese buy 47% luxury goods around 102 billion dollars

China's mainland consumers bought nearly half the world's luxury goods last year, with over 70% per cent of foreign consumption, against the backdrop of slowing growth in global luxury consumption. Experts believe that the growing consumer power of the Chinese and the rapid growth of outbound travel has led to a luxury consumption boom. However, as the Chinese consumer psychology matures, the future of luxury consumption abroad or will cool down.

The Chinese buy 47% of the world's Luxury goods

The Wealth Quality Research Institute of China's Luxury goods market, a report recently released by the Chinese consumer, shows that the consumption capacity of consumers abroad is 1508 euros, and consumption ability is the first in the world, which is 3-5 times the average consumption amount of overseas shoppers in many European and American countries. 2013, the Chinese bought 47% of the world's luxury goods, approximately 102 billion U.S. dollars, of which only 28 billion of the consumption remained in China, the amount of foreign consumption is as high as 73%.

As the number of outbound people has climbed, the Chinese have begun to release their consumption power globally and become the biggest buyers of the global tourism retail market, especially the duty-free market. Data from the top ten duty-free groups in 2013 show that sales of major tax-exempt groups have been growing well, with several companies maintaining an odd-numbered growth, with DFS selling 4.065 billion euros in the world's duty-free industry first, up 25% per cent from 2012. This has benefited from the huge consumer groups and strong spending power of tourists in Asia, especially in mainland China.

The report predicts that China's luxury spending will be further shifted to overseas in the 2014, with Hong Kong and Macao Regions (30%), Europe (22%) and the United States (21%) being the three major areas in which Chinese people buy luxury goods overseas. At the same time, the proportion of Chinese consumers buying luxury goods in China fell by 2% compared with 2013, and the Hong Kong and Macao regions fell by 14%.

The advantages of overseas "low price and high quality" are obvious

With the rapid growth of China's economy, the Chinese people's wealth is accumulating, the consumption capacity is increasing, and the consumption demand of luxury goods is increasing.

"With more than 1.3 billion people in China, consumers active in the luxury market are now about 75 million, even a small increase in wealth and spending could have a big impact." "Luxury consumption is not only related to GDP growth and fiscal policy, but also to social and cultural trends," Ervans Lang, head of the HSBC consumer and retail Research department. Because of this, very rich countries do not necessarily spend a lot on luxuries. In many Western cultures, Hyun-fu is considered improper. By contrast, the Chinese display their wealth is considered "appropriate".

In recent years, as the proportion of Chinese outbound travel has increased significantly, luxury goods in overseas "low quality" advantage is obvious, thus driving the overseas luxury consumption blowout.

"Luxury brands have been in China for nearly 20 years and have a vast distribution network in China, but they have not provided quality services to consumers and have not provided more competitive prices based on Chinese consumer demand." "The Wealth Quality Research Institute Dean Zhou Ting analysis that, first of all, some luxury brands in China's service and experience is not in place, especially many brands in China, there are price discrimination phenomenon, and secondly, many luxury goods in the entire channel coverage, so that consumers do not have a sense of consumer security, so will be more inclined to buy high quality of origin, Authentic luxury; Third, more and more Chinese consumers want more new products and experience, compared to foreign choices more diversified.

Future consumption will tend to be rational

However, the trend of annual growth of luxury consumption in China may be difficult to sustain this year. In the first 8 months of this year, consumption growth in China's luxury goods market grew by 10% per cent, a significant drop from the same period last year, according to the Global Luxury market survey, released jointly by Bain Consulting and the Italian Luxury industry association. By the end of this year, China's luxury goods market will reach 117.8 billion yuan in sales, down 2% from 2013. This is the first negative result since the survey started in 2000.

In Zhou Ting's view, the main reason for the sluggish performance of luxury goods in China is the shift in consumer demand. Sales of luxury goods in recent years in the domestic rapid growth, is entirely driven by market demand, brand operators do not have any credit to say. With the popularization of the Internet, the information is more and more full and transparent, China's emerging consumer groups are gradually maturing, the demand for fashion consumer goods become more rational. At this time, the brand operators did not do a good job of service and transformation, resulting in the luxury market began to break down and cooling.

"Chinese purchases of luxury goods abroad will fade in the future," he said. "Chen Fengying, director of the Institute of World Economics at the Institute of Modern International Relations in China, believes that people will not worship luxuries when they reach a certain level of affluence." When they can buy products that are the same as the basic prices abroad, they will not go abroad to buy them, and when China develops to a certain extent, China's brand effect will also develop, the future of the luxury of the kind of enthusiasm demand may fall and gradually fade.