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Chinese holidayers splurge on luxury goods overseas

Source:   Time:

 

By Yang Lina

BEIJING, Jan. 6 (Xinhuanet) -- "Chinese consumers" have become a hot topic since the beginning of the Year of Dragon as they spent record high on luxury goods overseas during the Spring Festival holiday last month.

They spent 7.2 billion U.S. dollars on luxury goods overseas during the holiday, an increase of 28.57 percent year-on-year, according to a report released by the World Luxury Association on Wednesday.

The figures for the 2011 and 2010 Spring Festival holidays were 5.6 billion and 4.9 billion U.S. dollars, respectively.

With an increasingly strong purchasing power, Chinese consumers have become main buyers of luxury goods worldwide.

EUROPE AS MAJOR BATTLEFIELD

During the Jan.1 – Feb.1 period, Europe's sales of luxury goods increased by 12 percent year-on-year, with Chinese consumers contributing 62 percent of the total.

The Chinese lavished most in France, Italy, Britain and Switzerland, with watches, leather products, fashionable dresses, cosmetics and perfumes topping their shopping lists.

In the meantime, total sales of luxury goods on the Chinese mainland only stood at 1.75 billion U.S. dollars, less than one-fourth of the amount overseas, according to the report.

Statistics showed that by the end of 2011, Chinese consumers’ total spending on luxury market had reached 12.6 billion U.S. dollars (excluding private planes, yachts and limousines), making China the world’s largest luxury-goods consumer.

The report also said that Chinese were more willing to buy luxury goods, especially overseas, during holidays, such as the National Day Holiday, Spring Festival Holiday, Christmas and the Valentine's Day.

The growth rate for luxury goods sales overseas will exceed that of domestic sales in 2012, lifted by a stronger yuan and increased overseas travel, according to consultancy, Bain & Co China Inc.

Lower prices overseas were the key attraction, with about 72 percent of those surveyed citing that factor, according to the association.

Besides, larger supply and wider choices of goods, better service from the country of origin were among other reasons that made Chinese consumers prefer purchasing luxury goods overseas.

But the boom in overseas sales was at the expense of the domestic market, some business insiders said.

"Our revenue is much less than that of the shopping malls in Hong Kong during the holidays, although similar brands are available," said Kuang Zhenxing, vice-president of Beijing Modern Plaza, which features high-end brands including luxury brands.

Kuang said the rush of consumers to overseas stores during the holidays made it tough to further develop the domestic luxury market.

SPENDING WITH "CHINESE CHARACTERISTICS"

With the Chinese people being better off, an emerging craze for luxury goods is inevitable. And the spending with "Chinese characteristics" is particularly noteworthy.

Chinese luxury-goods buyers spent most on personal products, such as clothes, perfumes and watches, while their Western counterparts spent most on houses, cars and family tours.

Besides, Chinese people spend a larger part of their incomes on luxury goods than Westerners. In other countries, people spend four percent of their wealth on luxury goods on average.

But in China, it is not uncommon that people would like to pay 40 percent or more of their incomes to realize their luxury dreams.

Moreover, Chinese luxury-goods buyers were much younger than those in the west where those aged between 40 and 60 were supposed to be the main body of luxury-goods consumers.

In China, however, 73 percent of the buyers were below 45 years old and 45 percent were aged between 18 and 34.

Industry watchers predicted that there is a long way to go for the Chinese consumers to spend rationally and maturely on luxury goods.

 

 

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