Asia and Luxury Spending

Isaac Mostovicz writes that a slowdown in the Chinese economy could have a knock-on effect on the Luxury industry...

A MasterCard survey on Consumer Purchasing Priorities has placed shoppers in Singapore, Japan and India among the Asia Pacific region’s top luxury consumers. According to the survey:

“Singapore (57%), Japan (50%) and India (46%) lead other countries in terms of ownership of luxury goods; nearly half of the consumers there own at least one luxury item worth more than US$500.”

According to the survey, Indians are more inclined to own jewellery; Singaporeans prefer luxury watches, jewellery and designer clothes and leather goods and Japanese consumers favour designer clothes and leather goods and luxury watches. MasterCard Worldwide Senior Vice President Porush Singh said:

“This survey shows that luxury shopping varies dramatically across emerging and developed markets. As with other recent surveys, it is the most buoyant and resilient economies that can afford to spend on luxury items and India and Singapore would certainly fall into that category… Luxury shoppers remain loyal to their brands, even when the economic climate isn’t favourable.”

It is perhaps worth noting that China was not one of the countries polled.

China has been a key area of growth for luxury markets in recent years, although an article published today on Wall St Cheat Sheet claims that according to a recent Bloomberg poll, 59% of global investors believe that China’s GDP will gain less than 5% annually by 2016, compared to a 9.5% gain last quarter, with the majority believing this slowdown will occur over the next two to five years.

According to Affinity China,

“China has grown its number of millionaires from 300k in 2006 to over 1 million today.  In fact, Chinese luxury consumers are on average 20 years younger than luxury consumers in the US or Japan.”

If the luxury market in China dows slow, this may have negative knock-on consequences for the luxury industry that has been trying so hard to appeal to Chinese consumers.

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