Out with the old, as Chinese chase new luxury labels abroad
By Astrid Wendlandt, Clare Baldwin and Siddharth Cavale
PARIS/HONG KONG/NEW YORK (Reuters) - Chinese luxury consumers are spending more on ready-to-wear and new labels, a notable shift in the behavior and tastes of the world's top spenders, a Reuters survey of retailers in the United States, Asia and Europe showed.
Chinese consumers are increasingly traveling alone, rather than in groups, and are more likely to buy for themselves or friends than for their boss, or the spouse of a government official. Just over two years ago, around a third of Chinese luxury purchases centered on gifts-for-favors including Rolex watches, Hennessy cognac and Gucci handbags.
Beijing's clamp-down on corruption and conspicuous spending since 2012 has squashed that market and prompted more Chinese to buy luxury goods abroad to save money and shop anonymously.
Analysts estimate more than two thirds of luxury purchases by Chinese buyers is done overseas, mainly in shopping hotspots such as Paris, Milan, London, New York and Tokyo, which can offer savings of more than 50 percent compared with China prices thanks to foreign exchange rates, tax refunds and other discounts.
"While they used to purchase luxury products to show off their wealth, now they want to show their good taste, their personal choice of the best the luxury industry can offer," said Daniele Zito, from consultancy Bain & Co, based in Italy.
"This is increasingly supporting more niche and less distributed brands."
More than a dozen luxury retailers surveyed in Asia, Europe and the United States said they had not seen any impact from China's economic woes this year. Such effects could feed through in coming months, analysts said.
Luxury spending by Chinese abroad is rising and their changing tastes have implications for many up-and-coming brands, the survey suggested. Continued...