Chinese consumers have overtaken U.S. shoppers this year to become the world’s biggest buyers of luxury goods, accounting for 25 percent of global sales through purchases at home and overseas, consultancy firm Bain & Co. said.
U.S. consumers now account for one-fifth of the world’s luxury sales, followed by the Japanese shoppers at 14 percent, according to a report released by Bain today.
The increasing affluence of Chinese consumer, who shop for luxury brands at home and overseas, has encouraged companies from Burberry Group Plc. to Prada SpA. to boost their Asian presence. Chinese shoppers spend over 60 percent of their total outlay outside the mainland, Bain found.
China’s domestic luxury sales, estimated to be worth 106 billion yuan ($17 billion) in 2011, are expected to grow 7 percent this year. That is a slowdown from 30 percent growth in 2011, as the expansion in the world’s second-largest economy weakens and more Chinese buy abroad.
Mainland Chinese tourists often shop in Europe, where they can save as much as 40 percent on luxury watches because of the weaker euro and on differences in tax or duties, according to the report.
China’s gross domestic product expanded 7.4 percent in the third quarter, the least in three years. The watch and jewelry sectors have been the most severely hurt by slower growth in China amid softer corporate gifting and increased overseas shopping, Bain said.
The compounded annual growth rate of China’s watches sector will probably slow to 5 percent this year, compared with 40 percent growth last year, according to the report.
Chinese officials should abandon extravagance and live more frugally amid a broader push to fight corruption, the official Xinhua News Agency reported this month, citing a ruling Politburo meeting chaired by Xi Jinping, the newly elected head of the Communist Party.