China Tax-free Report released by Fortune Character Institute shows travel retail industry worldwide had been through rapid growth in 2013. Under pressure of factory stores and high end department stores, its growth is slowing down nowadays. The report involved 25 tax-free companies and 76 senior executives in tax-free industry as well as 892 HNWIs (High-net-worth individuals) with personal asset worth over ten million yuan.
China’s international purchasing patterns and consumer profile are sharply evolving, with growing number of tourists flowing into all regions in the world. Spending from China tourists will see the fastest growth in Asia Pacific, followed by North America and Western Europe.
French and Italian brands were favored mostly by the Chinese riches. British brand joined the list of Top 10 for the first time in the report released by Hurun Research Institute, owing to the performance of fashion brand Burberry which ranked the ninth. Accessories gained the most popularity of gifts for the wealthy.
At present, China’s consumer’ per capita consumption abroad is about Euro1,508, ranking top in the world, and even 3 to 5 times more than European and American citizens. In 2013, China consumers had bought 47% of global luxury goods worth about $1,02 billion. And only $28 billion was in China while 73% of total value flew into overseas.
Fortune Character Institute estimates that in 2014, Chinese consumers’ purchase of luxury goods will further shift overseas. China consumers tend to buy luxury goods in Hong Kong & Macao, Europe and America, representing 30%, 22% and 21% respectively in 2014. Meanwhile, China consumers’ luxury goods purchase decreased by 2% in mainland, 14% in Hong Kong & Macao in 2014.
“The structure of China tax-free market is hard to change”, said director of Fortune Character Institute, Zhou Ting. China will open some free trade zones to make tax-free trials and appropriately soften online shopping supervision to reduce consumption outflow. In addition, China will further open Hainan Island on tax-free policies, however, China will not implement such trade mode in other cities or regions (no tax-free stores in cities).
It is also believed that tariff on China luxury goods will be decreased sharply in 2 to 3 years in the future, commented by Zhou Ting.
Worldwide Luxury Markets Monitor Report which was released by Bain & Company and Fondazione Altagamma shows total sales value of luxury goods will increase by 2% to 223 million euro this year. Its growth is much slower tsince 2011. As of 30 August 2014, the consumption of luxury goods in China increased by 10%, which indicates a decrease comparing with the same period in 2013. Absolute luxury goods and light luxury goods are the most popular ones among Chinese consumers.