Worldwide luxury sales boosted by Chinese overseas spending
In 2013 Chinese consumers spent an average of 1,508 Euros per person on shopping abroad.
Chinese customers lead the world in overseas spending, they are also the world’s largest group of buyers at duty–free shops. In 2013 Chinese consumers spent an average of 1,508 Euros per person on shopping abroad. This is 3-5 times the average amount of spending by the average European or American consumer. Chinese purchase almost half of the luxury products sold worldwide. However, only 27% of these luxury products are bought domestically.
Fortune Character Institute, a Chinese luxury market research group, reports that from 2013 the top 10 global duty-free groups have enjoyed strong sales growth. Many of the duty-free groups had double-digit growth. DFS had the most sales at 4.065 billion Euros, a 25% increase from sales in 2012. Customers from Asia and especially mainland China made the largest contribution to sales.
China’s top two duty-free companies also enjoyed tremendous growth. In 2013 Sunrise Duty Free (ranked #12 globally) had 882 million Euros in sales, 37% more than the previous year. In 2013 China Duty Free Group (ranked #14 globally) had 799 million Euros in sales, 22% more than the previous year. China Duty Free Group’s Sanya operations have been a source of continuous profits. In 2012 they had 2.027 billion RMB in sales. In 2013 sales figures soared at 2.815 billion RMB, a 40% leap from 2012.
73% of luxury spending by Chinese goes abroad
In 2013 Chinese purchased 47% of all luxury products sold worldwide at an estimated cost of US$102 billion. However, only US$28 billion of that consumption remained in China, 73% of Chinese luxury consumer spending goes abroad.
This year Chinese luxury spending will continue to be overseas. The three most popular regions for luxury shopping by Chinese are Hong Kong and Macau (30%), Europe (22%), and the USA (21%). In 2014 the USA had 7% growth in luxury sales to Chinese compared with 2013. Europe had 6% luxury sales growth and taking over an important market share from Hong Kong and Macau.
Online duty-free shops not a reality
The Chinese duty-free industry has been trying to expand online but the Chinese government has policies to restrict this from happening. According to the current market situation, it will be very hard to change the structure of the Chinese duty-free market within the near future. Sunrise Duty free and China Duty Free Group will continue to have a monopoly and there is no chance for a third competitor to appear anytime soon. The Chinese government will use the duty-free system within the country’s free trade zones along with a controlled amount of online shopping. They will also encourage the development of the duty-free industry in Hainan Province but the open-tax policies of Hainan will not spread to other cities or regions in China.(Translation by David)