BEIJING: The luxury goods market in China is expected to grow at around 2% in 2013 as the government's anti-corruption campaign bites, but sales of consumer goods generally will grow more than six times as fast.
A Ministry of Commerce spokesman indicated that retail sales would increase more than 13% for the year, Xinhua reported. This was attributed to growing consumer confidence in a buoyant economy and a government move to shift to domestic demand-driven expansion.
The spokesman also said that online shopping and strong sales of telecommunication equipment had boosted the sector, and he anticipated this momentum would continue into the first quarter of 2014.
A separate report from Bain & Co noted a dramatic cooling in the luxury market, with annual growth plummeting from 30% in 2011 to 7% in 2012 and a forecast 2% in 2013. Total luxury spending for the year was estimated at of 116 billion yuan ($19.1bn).
The China Luxury Goods Market Study said that a crackdown on graft and extravagant spending by government officials was starting to have an effect and highlighted sales falls in luxury watches and menswear, of 11% and 1% respectively. It also drew attention to a significant drop in gifting among consumers in Tier 1 cities.
But spending on women's wear and shoes was up between 8% and 10%. "Much of this performance stems from women's increasing sophistication and influence, which has driven men's and women's share of luxury spending in China to equal levels in 2013," said Bruno Lannes, a Bain partner in China and lead author of the study.
"This marks a rapid evolution from a starting point of over 90% spending by men in 1995," he added.
The study further revealed that up to two thirds of luxury spending took place abroad, as outbound tourism had grown rapidly and price-conscious shoppers had noted the price differentials for luxury goods in domestic and overseas markets, which could be as high as 40%.
While luxury spending in China represented just 7% of sales worldwide, Chinese consumers accounted for 29% of the global luxury market.
Data sourced from Xinhua; additional content by Warc staff