China tourist luxury spending boom could be over
26/08/2014
New figures quoted by the Wall Street Journal suggest that 100 million Chinese people took trips overseas in 2013, accounting for 9% of all overseas travel. However, if tax-refund claims are anything to go by, Chinese travellers’ share of overseas shopping was much higher at 27%.
Tax-refund claims at European destinations by Chinese visitors still grew in 2013, by 18% year on year. However, luxury brands have expressed some disappointment that the growth rate is substantially down on the 2012 figure, an astounding 57%.
One of the factors, according to analysts, is that the high margins luxury brands were able to charge in their Chinese stores are now on the wane.
Luca Solca, head luxury goods analyst at BNP Paribas, told the Wall Street Journal that luxury handbags were 50% more expensive in Chinese stores in February 2013 than they were in Europe. He said the difference is now 40%, but insisted that the portion of the price difference that corresponds to taxes in China is high. He said the portion of the mark-up that cannot be attributed to taxes is largely gone.
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