Consumers spent 1.2 trillion yuan overseas in 2015
Chinese consumers spent some 1.2 trillion yuan ($184 billion) overseas in 2015 and purchased almost half of the world's luxury products, a report has shown.
Chinese people spent a total of $116.8 billion on luxury products last year, accounting for 46 percent of the world's luxury sales, Fortune Character - a luxury product consulting firm - estimated based on revenues of over 20,000 brands, the Xinhua News Agency reported.
About $91 billion of Chinese consumers' luxury product purchases took place overseas, accounting for 78 percent of total Chinese luxury purchases, the firm said.
Price difference is the major reason why Chinese people shop overseas. According to the report, the price differences for products such as premium alcohol and wristwatches could reach 80 percent. Price differences for clothes, perfumes and cosmetics were usually below 30 percent.
Statistics from ymatou.com, a Chinese e-commerce platform, showed in an earlier report that Chinese people who preferred to shop overseas were usually age 25 to 40. People age 25 to 30 preferred to shop for shoes, clothes and cosmetics; people age 30 to 35 preferred bags and electronic gadgets; and people age 35 to 40 focused their spending on health products and jewelry.
Chinese observers said that the country's consumers will further increase demand for high-end durable products, but there is a long way to go to get these consumers to return to the domestic market.
"The retail price of those products reflects the cost of taxes, delivery channels, rent and gross margins. Thus products we buy from duty-free stores in Hainan Province are still more expensive than those in foreign countries," Wang Weiqing, an expert with the Institute of Taxation at Shanghai Jiao Tong University, was quoted by Xinhua as saying.
Meanwhile, the inadequate development of the high-end retailing industry - including the establishment of duty-free stores - has not properly attracted consumers with high purchasing power to spend money domestically, Xinhua reported.
"We need to tackle the consumption outflow from both supply and demand," Zhou Ting, president of Fortune Character, told Xinhua. Zhou said that China needs to improve quality supervision and technical level on the supply side while boosting tax reductions to lower retail prices.
"Duty free stores in Japan and South Korea offer well-known international brands as well as domestically-made products. The quality improvement of national brands is the source of consumption," Zhou said.
China's economy saw 6.9 percent growth in 2015, the slowest annual expansion in a quarter century, but consumption has emerged as the new growth driver. Last year, consumption contributed to 66.4 percent of China's gross domestic product, up 15.4 percentage points from 2014, according to Xinhua.
