A surge in demand for luxury goods has seen Chinese-led spending overwhelmingly turn to international markets including Australia, according to the latest research from property group CBRE.
According to the latest report, Luxury Retail 2015, 70 per cent of all Chinese-led luxury purchases are now transacted overseas, resulting in increased sales across the world, including Australian markets.
“Chinese purchasers account for 30 per cent of the luxury spend worldwide and 70 per cent of these purchases take place overseas, showing that the downward shift in their economy has prompted Asian consumers to rethink their purchasing habits,” said CBRE head of research and consulting EMEA, Andrew Phipps.
“The advent of the new ‘anti-extravagance legislation’ in China and their consumers’ growing awareness of price differentials of up to 70 per cent has led to many preferring to make their purchases overseas, where the prices are far more attractive,” said Phipps.
CBRE head of retail brokerage leasing, Australia, Leif Olson said international brands were looking to capitalise on the uptick in demand for luxury goods by securing a presence in Australia’s biggest fashion hubs.
“In 2015, the Australian retail landscape has transformed significantly, with a plethora of global brands lining up to open stores across the country,” said Olson. “This momentum shows no sign of slowing down, with affordable luxury brands to lead the charge in Australia over the next year, while top tier brands will look at securing flagship assets in core locations.”
Olson said the next wave of growth in Australia’s luxury retail market would be centred on the expansion of retailers in Brisbane, Perth and Adelaide; the addition of food and beverage to luxury retail; and growth of premium childrenswear.
“The addition of food and beverage to luxury retail stores is an untapped market in Australia, and a widespread concept already seen in the world’s largest fashion meccas, including Hong Kong and Macau,” said Olson.
“Not everyone is in a position to splash out on a luxury branded handbag or wallet, but being able to have a coffee or meal at Armani, for example, broadens the brand’s appeal and makes it more accessible for everyone.“
Luxury childrenswear represents another opportunity for growth in Australia says Olson.
“Shifting the appeal of a brand from adults to families will be a major focus of retailers expanding in Australia, with this helping them to engage and reinforce relationships with their key clients – the parents – while building their future consumer base from the next generation.”
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