China’s crackdown on extravagance and its anti-corruption campaign appears to be having a significant impact as Bain & Co reports that spending on luxury goods is estimated to grow at only 2% in 2013 – its slowest pace since 2000 (and dramatically lower than the 7% growth last year). “The mindset among global brands [in China] is changing from ‘where do we find growth’ to ‘how do we create growth’,” Bloomberg reports as “gifting” to high-ranking officials – one of the major growth engines of the industry – has crushed luxury watch sales down 11% in 2013. Ironically, given yesterday’s mall-jumping news, female shoppers are picking up some of the slack with shoes growing 8-10%. New store openings fell by 33%.
China’s luxury spending grew this year at the slowest pace since at least 2000 as more shoppers traveled abroad and the government’s anti-corruption efforts curbed purchases, consultant Bain & Co. said.
Spending in luxury goods is estimated to have increased about 2 percent in 2013, compared with 7 percent last year, the Boston, Massachusetts-based company said in a report released yesterday. Growth in 2014 will be at a pace similar to this year, it said.
Demand for luxury items from Swiss watches and expensive liquor have slumped since President Xi Jinping ordered officials to cut down on lavish spending and stepped up investigations into graft.
China’s crackdown on extravagance and its anti-corruption campaign had a “large” impact on gifting, one of the major growth engines of the industry, and that hit sales of watches and menswear the most this year, Bain said. Sales of luxury timepieces declined by 11 percent in 2013, it said.
Chinese consumers, who last year overtook shoppers in the U.S. to become the world’s biggest buyers of personal luxury items, account for 29 percent of global purchases, Bain said.