China’s luxury prices may be astronomically high compared to those of the United States, Europe, and Hong Kong, but they’ve grown at the lowest rate seen in seven years, according to a new report.
Late last week, the Hurun Report published the Chinese version of its annual Luxury Consumer Price Index (CPI), which found that luxury prices have grown by 1.52 percent, a decline of 3.42 percent from last year and a seven-year low overall. The rate was lower than both that of inflation and of the general CPI for the country.
“Driven by consumer demand, luxury prices were increasing fiercely in the past few years, but that momentum seems to have come to a halt this year. The main reasons are China’s economic slowdown and the fight against corruption,” said Hurun founder Rupert Hoogewerf.
Taking a closer look at the report’s findings for each individual sector, it is clear that heavily “gifted” items which have disproportionately suffered as a result of the crackdown have also seen the lowest price growth rates, and some of them have even gone into negative territory. Alcohol and smoking products declined the most at negative 1.85 percent, a number dramatically affected by Moutai baijiu, which declined by a stunning 14.58 percent. Watches and jewelry also had it particularly hard, with a decline of .85 percent.
Meanwhile, other consumer goods not as reliant on gifting income fared much better than their counterparts. Car prices were up 4.15 percent, leisure activities grew by 3.56 percent, and beauty and skincare increased 4.63 percent. Travel was the category with the highest jump of 6.23 percent.
The methodology of the study involves a survey of the prices of 77 items across China’s luxury industry. Out of these items, 13 saw a drop in price and 28 saw a rise in price, while 36 stayed the same.