In Markets

China’s luxury lifestyles fall prey to the Far East slowdown

Burberry Shanghai - Retail in Asia

Workers on the front line of China’s luxury goods and services market are protesting over wage arrears and lay-offs, amid a slowing economy, a war on graft, and changing trends which have seen more consumers buy high-end goods directly from abroad – including Britain.

A four-year corruption crackdown and a cooling of the Chinese economy continue to bite its luxury market, particularly top-end brands exposed to the high street, such as Burberry.

The trend has forced many global retailers to change their strategies to lure a new generation of fashionable young Chinese consumers who prefer to purchase luxury global brands on cross-border e-commerce sites, rather than wait for it to be released in China.

Meanwhile, protests among workers at luxury cosmetic booths and a string of high-end stores, including two Calvin Klein outlets, have added to the woes of the luxury goods and services industry.

Top of the range golf courses and high-end spas have witnessed an increase in demonstrations from desperate workers amid the squeeze in spending by China’s rich in the domestic market.

The price of high-end goods and services purchased by China’s super rich at home and abroad increased by more than 5pc last year, according to a report released by Hurun last month.

However, most of that rise can be attributed to health and education – two areas about which affluent Chinese have become increasingly informed, the report said.

Property is also another growth area, particularly high-end apartments in the more stable overseas markets.

As many rich Chinese have turned their backs on the high street, China’s overall luxury market declined 2pc to 113bn yuan (£13bn) last year, management consultancy Bain & Company said.

A separate report by Deloitte’s showed that sales from China and Hong Kong luxury high street jewellers dropped by 6.8pc last year.

(Source: Telegraph )

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