BEIJING—While Chinese consumers might be buying fewer luxury goods at home these days, they are still doing plenty of high-end shopping when they travel internationally, according to recent research reports from the Fortune Character Institute and HSBC.
Mainland consumers made 76 percent of their luxury goods purchases while traveling internationally last year, according to Fortune Character. In 2014, Chinese luxury spending within China dropped 11 percent on the year to $25 billion but luxury consumption outside of China grew more than 9 percent year-on-year to $81 billion, Fortune said.
In a separate report entitled “Globe-Trotting Shopper”, HSBC gave its own estimates. The bank said that Chinese consumers do about two-thirds, or 66.6 percent, of their luxury spending overseas. HSBC said Chinese represent around a third of all luxury sales globally and Chinese tourists will likely be the biggest growth driver for the luxury sector in coming years. The report advises luxury brands to shift their focus from expanding retail locations in China to learning how to better serve Chinese clientele abroad.
Many Chinese make luxury purchases in Hong Kong and Macau, usually the first destinations for mainland residents to travel abroad. But that spending will expand further into Europe, the United States and Australia, HSBC said.
Mainland tourists now account for 40 percent of luxury sales in France, 35 percent of luxury sales in Italy and around a quarter of luxury sales in the United Kingdom, HSBC said. Chinese traveling to Paris allocate 80 percent of their budget to shopping, HSBC said.
HSBC said that while Chinese tourists account for around 10 percent of luxury sales in the U.S., that figure is projected to increase as mainland tourists to the U.S. is forecast to jump four times by 2021.
High taxes on luxury products sold in China have long been a barrier for consumption. This is now compounded by a heavy-handed government anti-corruption campaign, which has dampened purchases of luxury items on the mainland once given as gifts, which would help individuals secure relationships or other business dealings with government officials. Slowing economic growth is also a factor impacting the purchase of luxury goods in China.