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Report reveals China's luxury market back to 'rational growth'

(China.org.cn) Updated: 2016-08-02 09:52

Report reveals China's luxury market back to 'rational growth'

An employee puts a handbag on the display shelf in a store in Hangzhou, Zhejiang in May 18, 2013. [Photo/IC]

 

Chinese consumers have been famous for their enthusiasm for luxury products in recent years, but a report said the country's luxury market is returning to a "rational growth."

"The past year has seen the end of the wild growth of the luxury market in China, and luxury brands are demonstrating new strength," reveals a recent survey by the magazine Fortune China.

The survey was conducted among 45,000 magazine readers who hold senior executive positions to find out about their consumption of luxury products.

The luxury market saw a golden era in China before 2012, when many brands registered double-digit or even 100 percent growth, but the market is now narrowing down and requiring more "fine and intensive operation."

The report said that luxury brands are now trying to win over Chinese consumers by providing better services and experience, citing an example of the rare price cuts by French luxury brand Chanel in China last year.

77.6 percent?of the survey respondents make luxury purchase for their own use, registering consecutive growth in four years, while those who buy luxury products for friends and as business gifts account for only 15.5 percent?and 6.0 percent, according to the survey.

The earliest group of Chinese luxury consumers cultivated a better understanding of luxury goods, and become more focused on the improvement of their lives brought by luxury goods, instead of a blind pursuit of the brands, said Li Rixue, the CEO of Secoo, China's luxury e-commerce platform. "Purchasing for their own use is the best example of the rising of Chinese consumers' spending power," he added.

Chinese luxury consumers now are more rational with more emphasis on the quality of luxury goods, according to the report. They seek the quality of the products (73.9 percent), better cost (57.2 percent) and brand culture (52.8 percent) when it comes to purchasing decisions, according to the report.

An increasing number of Chinese prefer buying luxury products in overseas countries, making up 40.8 percent?of the entire Chinese luxury purchase population, according to the report. This has to do with the ever-increasing number of Chinese who travel overseas, which reached 120 million last year.

32.8 percent?of Chinese consumers make luxury purchases in Chinese mainland cities, and 26.4 percent?of them buy the products in Hong Kong, Macao and Taiwan -- registering declining rates of 3.4 percent?and 5.4 percent?respectively.

For those who prefer buying luxury goods outside Chinese mainland, they list better prices, authentic products and more choices as their major motivation.

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