China's men spark revival in luxury
Source: Agencies |
01:31 UTC+8 January 22, 2013
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Print Edition
Print Edition
CHINA'S fashionable men are snapping up designer bags, driving a rebound in the luxury market months after a slowdown in spending by the world's biggest luxury goods buyers spooked global investors.
Men account for about 55 percent of China's luxury goods market, well above the world average of 40 percent, according to brokerage CLSA, partly because businessmen often buy expensive gifts to curry favor.
Companies such as Burberry and Gucci, which sell luxury clothing and accessories, benefit from this gift-giving culture and wealthy Chinese men's penchant for designer wear.
But they are also at risk of major sales swings because men are less likely than women to splurge on discretionary purchases in times of economic uncertainty, the research shows.
"Men are not prone to impulse shopping," said Mariana Kou, CLSA's consumer and gaming analyst in Hong Kong. "They tend to wait a little if the economy is pretty uncertain."
Chinese shoppers account for a quarter of all luxury purchases globally and last year surpassed US consumers to become the world's top spenders on luxury goods, according to consulting firm Bain & Co.
When China's economic growth slowed to a three-year low in the middle of last year, luxury demand dropped suddenly, sending shudders through a global market worth US$280 billion, according to Bain's estimates.
Burberry warned of weak sales in July and again in September, sparking fears of a sector-wide slump.
But as China's growth picked up to 7.9 percent in the fourth quarter after seven quarters of slowdown, sales rebounded.
Burberry said last week its Asia-Pacific sales rose 15 percent in the three months to December, led by Chinese mainland and Hong Kong.
Sales of men's clothing were up more than 50 percent over 2012's final quarter, and men's accessories such as handbags rose nearly 40 percent.
Last week, customers toting paper bags bearing the logos of Louis Vuitton, Hermes, Gucci, Prada and other global luxury brands were out in force at malls in Hong Kong and Macau, two nearby destinations for wealthy shoppers from Chinese mainland.
Personal assistant Da Fei trailed behind his boss, a real estate businessman from north China's Inner Mongolia, carrying items from Hermes and Kenzo through the One Central Macau shopping center.
"He likes to buy everything, particularly Hermes and Gucci," Da Fei said as his boss, decked out in salmon pink trousers and a black and white shirt, browsed inside a Kenzo store.
Shoulder bags
At the Gucci store in Macau's Wynn casino, four men clustered around a glass counter examining leather wallets, while seven other men browsed items such as the 6,000 patacas (US$750) shoulder bags. Only two women were in the shop at the time, while other customers queued up outside, waiting for security guards to let them in.
Data from Hong Kong shows retail sales are starting to perk up. They jumped 9.5 percent on the year in November, with jewelry, watches and other valuables up 13.7 percent after October's 2.9 percent decline.
But with Beijing cracking down on corruption, retail watchers caution China may not deliver the growth that made it a vital market for luxury brands after the global financial crisis in 2008.
Men account for about 55 percent of China's luxury goods market, well above the world average of 40 percent, according to brokerage CLSA, partly because businessmen often buy expensive gifts to curry favor.
Companies such as Burberry and Gucci, which sell luxury clothing and accessories, benefit from this gift-giving culture and wealthy Chinese men's penchant for designer wear.
But they are also at risk of major sales swings because men are less likely than women to splurge on discretionary purchases in times of economic uncertainty, the research shows.
"Men are not prone to impulse shopping," said Mariana Kou, CLSA's consumer and gaming analyst in Hong Kong. "They tend to wait a little if the economy is pretty uncertain."
Chinese shoppers account for a quarter of all luxury purchases globally and last year surpassed US consumers to become the world's top spenders on luxury goods, according to consulting firm Bain & Co.
When China's economic growth slowed to a three-year low in the middle of last year, luxury demand dropped suddenly, sending shudders through a global market worth US$280 billion, according to Bain's estimates.
Burberry warned of weak sales in July and again in September, sparking fears of a sector-wide slump.
But as China's growth picked up to 7.9 percent in the fourth quarter after seven quarters of slowdown, sales rebounded.
Burberry said last week its Asia-Pacific sales rose 15 percent in the three months to December, led by Chinese mainland and Hong Kong.
Sales of men's clothing were up more than 50 percent over 2012's final quarter, and men's accessories such as handbags rose nearly 40 percent.
Last week, customers toting paper bags bearing the logos of Louis Vuitton, Hermes, Gucci, Prada and other global luxury brands were out in force at malls in Hong Kong and Macau, two nearby destinations for wealthy shoppers from Chinese mainland.
Personal assistant Da Fei trailed behind his boss, a real estate businessman from north China's Inner Mongolia, carrying items from Hermes and Kenzo through the One Central Macau shopping center.
"He likes to buy everything, particularly Hermes and Gucci," Da Fei said as his boss, decked out in salmon pink trousers and a black and white shirt, browsed inside a Kenzo store.
Shoulder bags
At the Gucci store in Macau's Wynn casino, four men clustered around a glass counter examining leather wallets, while seven other men browsed items such as the 6,000 patacas (US$750) shoulder bags. Only two women were in the shop at the time, while other customers queued up outside, waiting for security guards to let them in.
Data from Hong Kong shows retail sales are starting to perk up. They jumped 9.5 percent on the year in November, with jewelry, watches and other valuables up 13.7 percent after October's 2.9 percent decline.
But with Beijing cracking down on corruption, retail watchers caution China may not deliver the growth that made it a vital market for luxury brands after the global financial crisis in 2008.
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