Chinese Luxury Consumers Spend Lavishly On Gifts; Follows Previous Studies Showing Men, Businesspeople Top Buyers
Hong Kong is a shopper's paradise. For many mainland Chinese luxury buyers, it's the first stop on their global shopping tour.
Last year, in their book “Luxury China: Market Opportunities and Potential,” Pierre Lu and Michel Chevalier wrote that luxury consumption in China is still very much dominated by men, most of whom spend lavishly on high-end products with the intention of giving them as gifts.
Lu and Chevalier’s assertions were recently confirmed in a study by HSBC, which found that men made up the bulk of luxury consumers in China, although the study found that an increasing percentage of the luxury purchases made by men in China is going to wives, girlfriends, or “second wives.” (e.g., mistresses.)
This week, a new study by McKinsey & Company indicates that around 50% of Chinese consumers who bought luxury goods last year did so with the sole intention of giving them to others as gifts.This is up from the 38% of consumers purchased with intent to “gift” in 2008.
According to China Radio International (CRI), part of the rise in luxury gift-giving last year was due to the relaxation of travel restrictions and the resulting jump in “shopping tourism.” As Jing Daily wrote in February, the largest-ever Chinese tour group to hit New York parted ways with around $6 million over the course of the Chinese New Year holiday, and Hong Kong retailers have been seen income soar as more mainlanders flock to the city’s duty-free shops and high-end malls. From CRI:
Clearly, China’s elite ranks of luxury consumers — half of whom purchase items to give others — are taking advantage of lower taxes (and no “luxury tax” elsewhere) on their global shopping sprees. But is this good for business in China? Obviously, major luxury brands — most of whom have sunk a great deal of money into setting up gleaming flagships in China — would love to see mainland-based buyers shopping locally, rather than just treating boutiques as showrooms to “test drive” the newest items before buying them in Hong Kong or online. However, opinions are mixed in China about whether the country should abolish its notoriously high luxury tax. From CRI:
More on Jing Daily
Who’s Buying Luxury Goods As Gifts In China?
Rupert Hoogewerf: Wealthy Chinese Are Country’s “New Nobility”
Chinese Luxury Shoppers Outspend Japanese 2-To-1 At South Korean Malls