Sales of luxury goods dropped in 2013, the third year of decline, and is expected to drop even further in 2014, according to a new Hurun report. “In terms of traditional luxury – leathers, accessories, watches – this year is going to be flat if not a little bit down,” Hurun founder Rupert Hoogewerf tells Reuters.
“In terms of traditional luxury – leathers, accessories, watches – this year is going to be flat if not a little bit down,” Hurun Report founder and chief researcher Rupert Hoogewerf told Reuters.
“For luxuries like tea, healthcare, even education, we are still looking at a booming market.”
The crackdown on conspicuous spending, which began in 2012, is part of a vow made by Chinese President Xi Jinping to be tougher on graft. He has focused in particular on gifts made to government officials often in exchange for preferential treatment or contracts.
As a result, many wealthy Chinese now buy luxury goods for themselves, rather than as gifts, Hoogewerf said.
Less popular were Bulgari – another LVMH brand – Salvatore Ferragamo, Tiffany and Co and the fiery baijiu liquor made by Chinese firm Kweichow Moutai Co Ltd, once the top tipple of Communist Party officials.
Affluent Chinese often shop online for the best price globally. They have also become more confident about their fashion choices, mixing high-street clothing and accessories with branded goods.
“There is a much savvier consumer out there,” Hoogewerf said. “There will be more purchasing done overseas than in China. For a brand that’s global it’s fine.”