MILAN – Wealthy Chinese remain the No. 1 buyers of luxury products worldwide, appearing inured to economic turmoil at home as they zigzag the globe in search of deals on everything from handbags to jewelry, according to a new study by Bain consultancy.
The study released Thursday by the Altagamma association of Italian luxury producers forecasts that global sales of personal luxury goods will jump 13 per cent to 253 billion euros ($276 billion) this year. That’s after two years of more modest 3 per cent growth.
Nearly one third of spending on high-end apparel, jewelry, handbags and shoes is by the Chinese. Their spending is growing strongly, while high-end shopping from other nationalities is growing only modestly more.
The study noted that a plunge in the Chinese stock market this year had hurt consumer confidence more in the United States, which has fresh memories of the 2008 financial crisis, than in China.
Just 20 per cent of Chinese spending is done at home, with many going on shopping binges in foreign countries, where prices are often lower.
While Paris, London and New York have been popular destinations, it is hard to predict where Chinese shoppers might flock to next, says Claudia D’Arpizio, a senior partner at Bain & Company who conducted the study.
Unlike European and U.S. shoppers, who tend to have favourite destinations they return to, the Chinese “have zero country loyalty,” D’Arpizio told The Associated Press.
They monitor the Internet for the best prices “and they change their travel plans to get to the best shopping destinations,” she said. That has become particularly true since China let its currency devalue this summer, making it somewhat more expensive for the Chinese to spend abroad.
For now, the weak euro is drawing them to Europe while a strong dollar keeps them from the United States. Nearby Tokyo has become their primary destination, while Moscow, whose currency shed 23 per cent of its value against the euro this year, is another key destination. And they have put Australia on the global luxury shopping map.
One consequence of this trend is that luxury goods shops are increasing their prices to squeeze profits out of the travelling Chinese shoppers, D’Arpizio said.
In Europe, that has translated into price increases of 5 per cent to 7 per cent a season as brands seek to reduce the price differential between China and Europe caused by currency swings.
Americans, the second largest class of global shoppers, are returning to Europe, fortified by a strong dollar. They are forecast to increase tax-free purchases in 2015 by a whopping 67 per cent. Stung by a weaker ruble, Russian tax-free shopping is slumping 37 per cent.
The United States, with its strong domestic market, remains the largest single personal luxury goods market with 78.6 billion euros ($87 billion) in projected sales this year. Japan is set to capture 20 billion euros ($22 billion) in sales, followed by 18 billion euros in China and about 17 billion euros in both Italy and France.