Prices of luxury consumer goods have dropped for the first time in eight years, according to the Hurun Luxury Consumer Price Index, an annual study that gauges levels of top-end individual spending in China , writes the China Daily. Lowering of the prices is one of the reasons, says Hurun founder Rupert Hoogewerf.
The China Daily:
According to the Hurun index, yachts and private jets witnessed the largest price drops, an average of 10.5 percent this year, as a result of foreign exchange differences.
It said the price for an Italian-made Azimut yacht, for example, dropped from 110 million yuan ($17.7 million) last year to 86.5 million yuan.
Gulfstream G550 airplanes have also dropped in price by 5 percent this year.
Luxury trips showed the second-largest fall in prices this year, by 5.7 percent on average, as a direct result of the appreciation in the renminbi.
The Japanese yen, it said, depreciated the most significantly by 21.9 percent by the end of June, while the Australian dollar and the euro depreciated by 18.5 percent and 18.3 percent respectively.
China’s largest online travel agency Ctrip.com.cn said that as Japan’s currency weakened against the yuan, it has grown in popularity with a growing number of Chinese travelers, and now predicts numbers to increase 100 percent over the summer holiday season.
The central government’s crackdown on extravagance and corruption has also resulted in a continuous price drop for other luxury products.
Patek Philippe watches and jewelry, meanwhile, dropped in price by 3.6 percent on average, while the price of imported wines and spirits from Hennessey has fallen by 5.2 percent.
Rupert Hoogewerf, founder and chief researcher of Hurun Report, said, however, that “Chinese consumers remain willing to buy luxury products with the increasing popularity of traveling overseas and enhanced information transparency.
“To boost domestic consumption, luxury brands such as Patek Philippe and Chanel have lowered their prices in China, which has exerted a huge impact on Chinese luxury industry.”
Luxury properties, according to the report, saw price drops of 1.9 percent year-on-year till date this year.
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