China’s Globe-Trotting Luxury Shoppers Boost Europe Sales as Mainland Market Slows

A Chanel boutique in Paris. Chinese shoppers now make 40 percent of all luxury purchases in France, according to a new report. (Shutterstock) While China’s luxury market remains in slowdown mode, Chinese shoppers are a significant and growing force when it comes to global luxury sales growth rates. This was the finding of a report recently released by HSBC called the “Globe-trotting Shopper,” which adds to the growing body of evidence supporting the idea that Chinese luxury consumers are rapidly shifting their spending outside the mainland as tariffs on imported goods remain high. Although mainland Chinese consumers have long been known for having a major impact on luxury sales in Hong Kong and other East Asian neighbor countries, they also have a formidable influence in Europe. HSBC finds that Chinese tourists make a stunning 40 percent of all luxury purchases in France, 35 percent in Italy, and 25 percent in the UK. While they currently only account for 10 percent of all sales in the United States, the report predicts this number to grow as Chinese tourism to the United States is projected to be four times higher by 2021. It also predicts that Moncler, Burberry, and Richemont will be the brands most likely to benefit from this growth. The report estimates that about two-thirds of Chinese luxury spending takes place overseas as Chinese shoppers take pains to avoid markups and tariffs within mainland China. This estimate is roughly in line with the findings of two other recent reports—consultancy Bain & Company estimated that 70 percent of all luxury purchases by Chinese consumers are either made abroad or through daigou channels, while the Chinese Fortune Character Institute recently released an even higher estimate stating that 76 percent of all Chinese luxury purchases are made abroad. When paired with China’s ongoing anti-corruption campaign and general economic slowdown, this trend has led to a slump in mainland luxury retail sales that has pushed brands to reconsider their strategies to reach Chinese shoppers. Bain estimated that China’s luxury market declined by 1 percent in 2014, while Fortune Character Institute claimed that it sunk by a stunning 11 percent (although it wasn’t clear about the methodology it used to find this number). As a result, brands have increasingly begun to view the "China market" as the "Chinese consumer market," recognizing that it's just as important to market to Chinese shoppers in Paris as it is in Shanghai. In addition, the report finds that shopping is still a major part of the itinerary for Chinese travelers, who devote 80 percent of their spending budget, or 11,000 euros (US$13,000) to shopping when they’re in Paris. This is likely welcome news for retailers who have read about the growing importance of “experiential luxury” to Chinese consumers such as spas, fine dining, and adventure travel. A recent survey by Ruder Finn found that wealthy Chinese consumers are now more willing to spend on travel than on luxury items—but they’re clearly still carving out a significant amount of shopping time on their trips. The report also concluded that Chinese consumers now take up about a third of all luxury sales worldwide—and that number is predicted to grow in the coming years. According to Euromonitor, China is expected to become the world’s second-largest luxury market after the United States by 2019—and Chinese tourist spending is likely to play a massive role in the rest of the markets on the list as well.

China’s Globe-Trotting Luxury Shoppers Boost Europe Sales as Mainland Market Slows

How Bottega Veneta weaved China’s forever it bag

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China’s Globe-Trotting Luxury Shoppers Boost Europe Sales as Mainland Market Slows

How Bottega Veneta weaved China’s forever it bag