LONDON — Despite some beginning to queue for Chanel again in Shanghai, the majority of Chinese spenders appear to be cutting back on luxury.
Some 86 percent of Chinese consumers are planning to adjust their spending in 2020, according to consultancy firm China Luxury Advisors.
Based on a survey CLA conducted in early March of 1,097 people across more than 30 cities in China, some 59 percent said they are more likely to decrease spending on luxury handbags and apparel, 43 percent to cut back on overseas travel and 45 percent on entertainment. Meanwhile, self-care stress management and healthy living will be prevailing themes in 2020.
Another report from Ruder Finn and Consumer Search Group said that, in a survey, 82 percent of 800 Chinese high spenders, with a medium 1.3 million renminbi, or about $183,000, in annual household income in mid-March believe the coronavirus will have a negative impact on the Chinese economy.
Spending willingness on jewelry, handbags, beauty products and automobiles saw a 10 to 15 percent drop from the previous survey. And some 20 to 25 percent said they will cut back spending on travel, fine dining and premium leather goods.
Some 23 percent said they will go on revenge buy after the outbreak. The percentage is 10 percent higher among the 21-to-25 and 26-to-35 age groups in first-tier cities, and 46-plus in second-tier cities. The money will mostly be spent on designer clothes, shoes, jewelry and beauty products.
Ming Gao, senior vice president and managing director of the Greater China luxury business at Ruder Finn, said: “The stored demand for certain luxury categories does exist after the outbreak, but our survey showed that it won’t be the leading sentiment. The increase of cutback on spending among the wealthy means brands will face a tougher challenge. Brands should think about how to build a better relationship with their customers when things get back to normal from now.”