International

Chinese Shoppers Spending More Money … In China

The wealthy shoppers of China are returning home — to spend, that is.

As noted by Reuters, the more affluent Chinese consumers are spending their wages at home, marking a resurgence of domestic luxury buying. This comes as a reversal of a three-year trend, the newswire reported, with domestic spending buoyed by a weaker yuan and lower domestic pricing. The higher-end luxury brands are the ones that stand to benefit most from this reversal of (domestic) fortune. The potential for increased luxury brand spending is considerable, as China’s wealthy citizens now account for a third of the world’s luxury spend. That’s up from only a 2 percent tally 16 years ago. The impetus to get consumers to buy — a systematic push by the government — appears to be bearing fruit.

Sales across brands such as Burberry and Tiffany are on the upswing in China, said Reuters, with continued momentum possible into the year-end Christmas and Chinese New Year season. The sanguine outlook has been echoed by Bruno Lannes, a partner with Bain based in Shanghai, who noted that there has been a 4 percent boost in mainland-centered sales after a steady three-year slide. He told Reuters: “Some brands are expecting 2016 to go back to their peak in 2012, though the mix is different. I expect some brands will beat that record.”

In one example, Richemont, which owns a series of luxury brands, including Cartier, said that it had seen “marked” October growth in the region. Similarly, Kering, which owns Gucci, among other brands, said that sales across the APAC region vaulted by 24 percent year over year in the latest quarter that ended in September.

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