BEIJING: China's luxury market is experiencing a period of "rational" growth, as consumers pay more attention to quality and are more likely to buy for themselves than for friends or as business gifts, a new study has said.
Fortune China conducted a survey among 45,000 magazine readers holding senior executive positions to find out about their consumption of luxury products.
The sector's boom years are now firmly in the past, according to the report; "wild growth" has ended but "luxury brands are demonstrating new strength" as they woo customers with better services and experiences.
Changing buying habits are evident in the finding that more than three quarters (78%) of survey respondents made luxury purchases for their own use; just 15.5% bought items for friends while a mere 6% bought them as business gifts, a practice that the government has discouraged.
"Purchasing for their own use is the best example of the rising of Chinese consumers' spending power," Li Rixue, chief executive of luxury e-commerce platform Secoo, told China Daily.
It also means that they are more rational in their approach, the report said, placing greater emphasis on the quality of luxury goods.
This consideration was instrumental in around three quarters (74%) of purchasing decisions, ahead of cost (57%) and brand culture (53%).
Price was, however, a major factor for the growing number of Chinese consumers who prefer to buy luxury products in overseas countries, alongside the authenticity of the products and the greater choice available.
Currency movements can boost the attractiveness of certain destinations. Already one million Chinese tourists visit Australia every year, for example, spending more than A$8bn during their stay.
A new report suggests that a depreciating Australian dollar will help the Australian luxury retail sector to grow by 11 % year, over the next five years, with tourists from China accounting for almost one third of that growth.
Data sourced from China Daily, China News; additional content by Warc staff