BEIJING: The cost of leading a "luxury" lifestyle is rising in China, as a variety of trends reshape the country's premium goods sector.
The Hurun Research Institute has just released its latest annual Luxury Consumer Price Index (available in English translation here), revealing that the cost of exclusive products and services grew by 7.7% over the year to June.
Such a total constituted a slowdown on the 11.3% expansion experienced in 2010, but outpaced the overall consumer price index, which was up 6.4% in June 2011.
"Luxury consumer prices rose in the last year as wealth continued to be created in China, triggering increased spending on luxuries," Rupert Hoogewerf, chairman of the Hurun Research Institute, said.
"The three factors affecting the Luxury Consumer Price Index are continued growth in market demand, changes in exchange rates and tariffs."
"The appreciation of the Euro and British pound against the yuan may both have contributed to the price increase."
The analysis was based on an assessment of 61 high-end products from nine categories, and showed the prices commanded by these items had grown by over a quarter in the last five years.
It covered everything from yachts and private plane rental, witnessing the greatest improvement, of 20.1%, to luxury cars, up by an average of 1.5%.
Hoogewerf argued the growing demand for "super toys" among China's burgeoning affluent classes drove the process.
"For example, a Beijing-to-Shanghai return trip on a US-manufactured Gulfstream G550, capable of seating 16 people, now costs 276,500 yuan, up about 15.6%," he said.
However, rising prices were not only observable across big-ticket categories. Accessories and skincare products also recorded a 16.6% lift year on year.
A Chanel handbag featured in the study was 61.6% more expensive than 12 months ago, on 37,500 yuan, while a Vertu Signature Rose gold mobile phone saw a 28.2% increase, to 295,000 yuan.
Elsewhere, an Ermenegildo Zegna suit had appreciated in value by 15.6%, carrying a price tag of 26,600 yuan as of June 2011.
Similarly, a range of revitalising creams made by Lancôme now sets buyers back an additional 10.3% compared with 2010, on 3,950 yuan, although La Mer face cream was flat, on 2,600 yuan.
Alcohol and tobacco registered a 9.2% rate of inflation, as a 30 year old bottle of Maotai - a variant of local spirit baijiu - posted a 60.8% leap, to 20, 580 yuan.
Watches and jewellery yielded a 5.7% lift, not least as the surging cost of buying raw material like gold and diamonds was passed on to consumers.
Travel - be it booking flights to visit overseas locations or the tariff for staying in hotels domestically - logged a 4.1% jump on the same terms.
As such, furniture was the sole category to endure a year on year decline, down by 12.2%, mainly due to the falling cost of redwood, which is particularly popular in China.
It is estimated there are 960,000 millionaires in China, a 9.7% improvement year on year, and 60,000 billionaires, a figure that climbed by 9.1% on an annual basis.
Data sourced from The Hurun Research Institute, Shanghai Daily, China Daily; additional content by Warc staff