More mainland Chinese are traveling overseas – and they’re spending more in stores when they do, according to a study by KPMG.
The majority of respondents (72 per cent) said they purchase luxury items during overseas trips, with cosmetics, watches and bags the most popular.
For purchases of cosmetics and perfumes, 60 per cent said they preferred shopping in Hong Kong, Taiwan and Macau, significantly up on the 43 per cent of the last survey in 2009. Mainland China was voted their second choice.
Europe also saw a marked increase, up from three percent in 2009, to 20 per cent in 2012.
There was a five-fold increase in the number of Chinese consumers buying watches in Europe – from five per cent in 2009 to 25 per cent in 2012.
While top tier luxury brands have and continue to open flagship stores across China, particularly in Beijing and Shanghai, many respondents indicated they prefer to buy overseas, where they have access to broader and sometimes newer selections.
And as consumers seek better prices and product knowledge, visiting some of the major luxury brands located in places like Savile Row, Bond Street and Avenue des Champs-Élysées is therefore becoming increasingly popular.
In terms of top destinations, the survey shows that Hong Kong remains the number one choice for Mainland Chinese consumers, followed by Europe and Japan. A low tax and VAT environment is one of the factors that plays to its advantage.
“Hong Kong plays a vital role as a window to the world and a sophisticated market for the Chinese consumers from the mainland,” said Guy Salter, deputy chairman of Walpole, an organisation representing the UK luxury industry.
“In terms of traveling further overseas, we see the traveling Chinese having a significant impact in Paris and Continental Europe compared to the UK. This is also partly due to easier visa arrangements,” added Salter.
In response to the rise in Chinese travelers, global luxury brands are adapting to better serve Chinese consumers. Stand alone duty free shops overseas have seen sales rise, particularly in cosmetics and perfumes.
The study says with increased opportunities for Mainland Chinese to travel overseas and with rising discernment and individualism, there is significant potential growth ahead for global luxury brands.