Shoppers queue up at a Prada store in China. (Photo/Xinhua)
Sales of luxury goods in mainland China are expected to report a year-on-year growth of only 7% in 2012, compared with 30% the year before, according to the findings of a new study from American global management consulting firm Bain & Company.
Meanwhile, overall sales growth in Hong Kong are also expected to slow to 10% year-on-year.
As the peak Christmas shopping season approaches, various luxury brands have begun offering discounts on products such as clothing, footwear and handbags, making high-priced international luxury goods more consumer friendly.
Bain's 2012 study on China's luxury market, released on Dec. 12, said that due to the continuous slide in the euro and increasing flows of cross-border capital, Chinese consumers have become one of the world's major buyers of luxury products and now accounts for about 25 percent of global sales.
On the other hand, soaring prices of high-end products in China and frequent reports of quantity and quality problems in recent years have prompted many Chinese consumers to shop for luxury goods in Hong Kong, Macau and other countries. Data revealed that on average, prices for luxury goods in mainland China were 45% higher than in Hong Kong, 51% higher than in the United States and 72% higher than in France.
Bain's report also indicated that spending by Chinese consumers on overseas luxury goods in 2012 accounted for more than 60% of the country's total consumption of luxury goods. China's economic slump had affected consumer confidence and led to a decline in its luxury goods market, the report found.
The report added that China's luxury goods market had registered a compound annual growth rate of 27% in 2010 and rose to 30% in 2011, but is expected to slip to just 7% this year.
Bain said the United States was expected to remain as the world's largest consumer of luxury goods, based on the country's estimated spending of US$75 billion, followed by Japan, Italy, France and China.