Chinese set to go on luxury spending spree
China's luxury online spending is set to account for 13 percent of the total luxury expenditure by 2021, nearly double the 7 percent in 2016, a joint report by CBN Data and Alibaba's retail site Tmall shows.
The report attributes a convenient purchasing process, favorable online experience and quality assurance as the major driving force behind that online shift.
In recent years, luxury items have become part of consumers' daily life with beauty products and men's personal care items among the fastest growing luxury segments.
Consumers born in the 70s and 80s are still the mainstream luxury buyers, but those born from 1995 onwards are also rapidly becoming buyers of luxury items especially beauty products and watches.
China remains "an engine of growth" for the luxury category because both the size of the population and the spending power of the middle class continue to grow, consultancy Bain & Co noted.
Last year Chinese consumer spending on luxury items through domestic shopping channels grew 7 percent due to lower import tax and a relaxed policy on imported luxury goods, compared to a 2 percent drop in overseas expenditure.
Tmall's sales data show that purchases of luxury personal care and cosmetics items are rising rapidly while in 2013, luxury sales were still limited to specific categories like liquor and watch, which made up nearly 40 percent of total spending.
Last year, Chinese consumers bought US$92.8 billion worth of luxury items overseas, making up 77 percent of overall luxury purchases.
Tmall launched a new luxury pavilion which operates on an invite-only basis for brands and currently includes brands such as Burberry, Hugo Boss, La Mer, Maserati and Guerlain (LVMH) and Zenith. The new pavilion will serve as a comprehensive and tailored platform allowing brands to deliver services typically reserved for shoppers offline.
Earlier this month, Spanish fashion brand Loewe held a flash sale of its iconic “Barcelona” handbag on Tmall which marked the LVMH-owned luxury house’s first foray into China’s e-commerce scene.
