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Chinese tourists' luxury spending soars: Global Blue
[PARIS] Chinese tourists spent a record amount on luxury goods last month, helped by shopping sprees in Europe as the weak euro made items cheaper than at home, VAT refund company Global Blue said.
Spending by Chinese tourists, the biggest buyers of luxury goods, soared by 122 per cent in March after a 52 per cent rise in February, bringing the increase for the first quarter to 67 per cent, Global Blue said in a report published on Monday.
This compared with a rise of 32 per cent in the fourth quarter and 18 per cent in 2014.
Many Chinese tourists have stayed away from luxury hot spot Hong Kong - where big brands have invested significantly in new shops in recent years - following pro-democracy protests last year.
"This continues to reflect the redirection of Chinese spending from Hong Kong towards Europe in particular, given the widening of the price differentials, which is a much-discussed theme during the ongoing reporting season," broker Barclays said in a note about the Global Blue figures.
Exchange rate movements have led to significant regional price differences, with the same luxury item sometimes costing more than 50 per cent less in European capitals than in major Chinese cities.
The trend has encouraged Asian buyers to snap up goods in Europe and resell them at home, a practice often referred to as parallel trading or the grey market and which brands worry could raise issues about their products' perceived authenticity.
Broker JPMorgan Cazenove estimates 20 to 40 per cent of luxury sales in mainland China are now parallel, based on what luxury goods executives and consultants have said.
Last week, Burberry said it would re-align prices to match rivals after brands such as Chanel and Patek Philippe cut prices in Asia by over 20 per cent to reduce the discrepancy with Europe.
Kering will be expected to give an update on its pricing policy, particularly for its flagship Gucci brand, when it posts first-quarter results on Tuesday.
Global Blue said overall, worldwide global tourism spending reached its highest level in March since May 2011 despite Russian spending falling 39 per cent, against a 51 per cent drop in January.
Watches and jewellery performed best, with sales up 67 per cent in March against 32 per cent the previous month, it said. Leather goods sales rose 50 per cent, versus 24 per cent in February.