China Luxury Growth Slows to Weakest Pace Since 2000, Bain Says
2013-12-16 16:01:10.0 GMT
By Bloomberg News
Dec. 17 (Bloomberg) -- China’s luxury spending grew this
year at the slowest pace since at least 2000 as more shoppers
traveled abroad and the government’s anti-corruption efforts
curbed purchases, consultant Bain & Co. said.
Spending in luxury goods is estimated to have increased
about 2 percent in 2013, compared with 7 percent last year, the
Boston, Massachusetts-based company said in a report released
yesterday. Growth in 2014 will be at a pace similar to this
year, it said.
Demand for luxury items from Swiss watches and expensive
liquor have slumped since President Xi Jinping ordered officials
to cut down on lavish spending and stepped up investigations
into graft. Kering SA’s Gucci sales fell in the third quarter
and LVMH Moet Hennessy Louis Vuitton SA saw softening demand in
perfume and cosmetics during the period amid a slowing economy
and a shift to overseas purchases.
“China’s luxury market has quickly changed from land-grab
to slow, steady strategic focus,” said Bruno Lannes, Bain’s
Shanghai-based partner and lead author of the study. “The
mindset among global brands here is changing from ‘where do we
find growth’ to ‘how do we create growth.’”
China’s crackdown on extravagance and its anti-corruption
campaign had a “large” impact on gifting, one of the major
growth engines of the industry, and that hit sales of watches
and menswear the most this year, Bain said. Sales of luxury
timepieces declined by 11 percent in 2013, it said.
Swiss watch exports, including those from Cie. Financiere
Richemont SA and Swatch Group AG, to China dropped 14 percent in
the first 10 months of the year, data from the Federation of
Swiss Watch Industry show.
Overseas Purchases
Chinese shoppers now buy more than two-thirds of their
luxury items overseas, a move that has led to a slowdown in
store traffic and openings on the mainland, according to the
Bain report.
Chinese consumers, who last year overtook shoppers in the
U.S. to become the world’s biggest buyers of personal luxury
items, account for 29 percent of global purchases, Bain said.
Female shoppers in the world’s most-populous nation are
starting to increase their spending power and influence, with
womenswear and shoe categories growing between eight percent to
10 percent this year, Bain said.
The study showed new store openings by 20 brands tracked by
Bain fell by one-third this year to about 100 new outlets, with
the focus now on renovation and operational improvement for
domestic shoppers.
For Related News and Information:
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--Liza Lin. Editors: Stephanie Wong, Subramaniam Sharma
To contact Bloomberg News staff for this story:
Liza Lin in Shanghai at +86-21-6104-3047 or
llin15@bloomberg.net
To contact the editor responsible for this story:
Stephanie Wong at +852-2977-6036 or
swong139@bloomberg.net
2013-12-16 16:01:10.0 GMT
By Bloomberg News
Dec. 17 (Bloomberg) -- China’s luxury spending grew this
year at the slowest pace since at least 2000 as more shoppers
traveled abroad and the government’s anti-corruption efforts
curbed purchases, consultant Bain & Co. said.
Spending in luxury goods is estimated to have increased
about 2 percent in 2013, compared with 7 percent last year, the
Boston, Massachusetts-based company said in a report released
yesterday. Growth in 2014 will be at a pace similar to this
year, it said.
Demand for luxury items from Swiss watches and expensive
liquor have slumped since President Xi Jinping ordered officials
to cut down on lavish spending and stepped up investigations
into graft. Kering SA’s Gucci sales fell in the third quarter
and LVMH Moet Hennessy Louis Vuitton SA saw softening demand in
perfume and cosmetics during the period amid a slowing economy
and a shift to overseas purchases.
“China’s luxury market has quickly changed from land-grab
to slow, steady strategic focus,” said Bruno Lannes, Bain’s
Shanghai-based partner and lead author of the study. “The
mindset among global brands here is changing from ‘where do we
find growth’ to ‘how do we create growth.’”
China’s crackdown on extravagance and its anti-corruption
campaign had a “large” impact on gifting, one of the major
growth engines of the industry, and that hit sales of watches
and menswear the most this year, Bain said. Sales of luxury
timepieces declined by 11 percent in 2013, it said.
Swiss watch exports, including those from Cie. Financiere
Richemont SA and Swatch Group AG, to China dropped 14 percent in
the first 10 months of the year, data from the Federation of
Swiss Watch Industry show.
Overseas Purchases
Chinese shoppers now buy more than two-thirds of their
luxury items overseas, a move that has led to a slowdown in
store traffic and openings on the mainland, according to the
Bain report.
Chinese consumers, who last year overtook shoppers in the
U.S. to become the world’s biggest buyers of personal luxury
items, account for 29 percent of global purchases, Bain said.
Female shoppers in the world’s most-populous nation are
starting to increase their spending power and influence, with
womenswear and shoe categories growing between eight percent to
10 percent this year, Bain said.
The study showed new store openings by 20 brands tracked by
Bain fell by one-third this year to about 100 new outlets, with
the focus now on renovation and operational improvement for
domestic shoppers.
For Related News and Information:
Luxury Market Headed for Slowest Year of Growth Since 2009: Bain
NSN MVDN6Q6VDKHZ <GO>
Chinese Learning Luxury Pair Wine With Duck Not Sprite: Retail
NSN MSLC7Z6KLVRY <GO>
Omega Joins Patek Philippe Seeking Growth to Offset Slower China
NSN MLYW406TTDS1 <GO>
Bloomberg Industries on luxury goods BI LUXG <GO>
Top consumer stories: TOP CONS <GO>
--Liza Lin. Editors: Stephanie Wong, Subramaniam Sharma
To contact Bloomberg News staff for this story:
Liza Lin in Shanghai at +86-21-6104-3047 or
llin15@bloomberg.net
To contact the editor responsible for this story:
Stephanie Wong at +852-2977-6036 or
swong139@bloomberg.net