BEIJING: Chinese consumers accounted for almost half of global sales of luxury products in 2015, a new report has claimed.
In total, they spent $116.8bn on such items, according to Fortune Character, a luxury product consulting firm; that amounted to a 46% share of the global market.
Furthermore, some $91bn of luxury spending took place overseas, meaning that 78% of luxury purchases by Chinese consumers did not take place in China.
Price difference is the major reason: this can be as high as 80% in the premium alcohol and wristwatch categories, the report said, but under 30% in others, including clothes, perfumes and cosmetics.
"The retail price of those products reflects the cost of taxes, delivery channels, rent and gross margins," explained Wang Weiqing, an expert with the Institute of Taxation at Shanghai Jiao Tong University.
"Thus products we buy from duty-free stores in Hainan Province are still more expensive than those in foreign countries."
But with the country restructuring its economy to have less reliance on manufacturing and to make consumption more important, the pressures are growing on the top end of the retailing sector to keep more of this spending in China itself.
"We need to tackle the consumption outflow from both supply and demand," Zhou Ting, president of Fortune Character, told Xinhua News. That means improved quality supervision and technical level on the supply side, he explained, while also boosting tax reductions to lower retail prices.
"Duty free stores in Japan and South Korea offer well-known international brands as well as domestically-made products," he noted. "The quality improvement of national brands is the source of consumption."
Chinese consumers generally are optimistic about the immediate future, as Nielsen's most recent Chinese Consumer Confidence Index added one point to 107 in the fourth quarter of 2015 while consumers' willingness to spend rose two points to 48, the highest level in four years.
Data sourced from Sina, Shanghai Daily; additional content by Warc staff