The stay-at-home Chinese still buying into luxury lifestyle
WHEN Tiffany & Co said this month it was sending its priciest jewellery to mainland China to reach wealthy shoppers no longer jet-setting abroad, it reflected a trend helping global luxury brands weather a Chinese economic slowdown.
Well-off consumers, whose trips to fashion capitals like New York and Paris have long buttressed luxury-sector sales, are increasingly staying at home because a weaker yuan has blunted their overseas firepower.
Hong Kong, another top shopping destination, has also become less appealing due to mass anti-government protestss.
However third-quarter earnings showed that, despite China’s economic growth slowing to a three-decade low, shoppers are continuing to spend heavily on luxury — but they are doing it at home or online, with their wallets reinforced by savings on flights, hotels and other steep holiday costs.
Several large US and European luxury brands reported strong demand for their goods in China, even as Beijing and Washington remain embroiled in a trade war.
Hermes, known for its leather goods, printed silk scarves and Birkin bags, said its stores in mainland China had outstanding results that helped fuel a 19pc sales gain in the wider region.
Italy’s Moncler is meanwhile studying expanding the size of its stores in big cities like Beijing and Shanghai.
“The whole economy is slowing down and salary growth is also slowing. So consumers who originally bought when they travelled will now buy domestically,” said Iris Pang, Greater China economist at ING.