High prices of luxury goods in China may be sending shoppers abroad in record numbers, but a new report states that product selection and economic conditions are significant factors in their shopping decisions.
According to consulting firm FDKG’s “Luxury Insights China” report for the third quarter of 2015, Chinese consumers the firm interviewed cited a perception of the availability of hard-to-find products as a reason for shopping abroad. One 28-year-old woman they interviewed stated that she opted to shop abroad during the sale season because sale prices abroad are lower than those in China. But, “in addition,” she said, “there are many more choices in overseas stores.”
As Chinese luxury consumers are putting a growing emphasis on experiential luxury and spending more on fine dining, brands are also increasingly featuring food and beverage options at their China stores to attract more shoppers domestically. Vivienne Westwood, Gucci, Dunhill, and Shanghai Tang have all opened restaurants or cafes at their stores in China. Gucci’s restaurant has seen massive demand, with two-hour waits and recommendations that reservations be made a month in advance. Other reports have also emphasized the growing popularity of fine dining in China. A recent Financial Times article quoted one expert as stating that the Michelin-starred Jean Georges restaurant in Shanghai “had a clientele which was 80 percent French; now it’s 80 percent Chinese.”
The report notes that it is vital for brands to make sure these new options live up to their prestigious brand name, finding that consumers on Yelp-like review site Dianping have given Gucci’s new Shanghai restaurant an average of three stars. One major complaint among reviewers has nothing to do with the quality of the food, however: many users are expressing frustration that there aren’t enough Gucci logos present in the restaurant to show off in photos of their experience on social media. One review translated for the report states, “It’s not like Vivienne Westwood where the logo is everywhere. If you want to take a photo, the chef won’t agree to create a Gucci logo on the plate, so don’t bother!” Another says, “If you want to tell it apart from other international restaurants, maybe the napkin is the only indicator?”
The report also notes that China’s currency devaluation and stock market slump, while not significant on a pricing level, could have a “psychological” effect on Chinese consumers by denting their confidence in the overall strength of the economy. The report featured comments by luxury consumers surveyed who expressed their anxiety about the economy and stated that it had affected their luxury spending. “My friends and I share the same feeling that the economy now is quite bad,” says one wealthy 42-year-old car store owner, who says that the stock market conditions “greatly influence us and we are very cautious when making purchases now.”