Chinese prefer to buy luxury goods overseas
Worldwide sales of luxury goods continue to increase according to the latest report by global property advisor CBRE, Luxury Retail. 70%* of all Chinese-led luxury purchases are now transacted overseas, resulting in sales increases in Western Europe of 13.4%, Central and Eastern Europe 18%, Africa 26% and 5% in North America over the last two years.
Chinese purchasers account for 30% of the luxury spend worldwide and 70% of these purchases take place overseas, leading to rise in the sale of luxury goods across Europe and America.
This shift in Chinese shopping habits is in turn providing opportunities for luxury brands to grow their presence across Europe and America, as they become the main hubs for luxury expansion over the next five years.
We will continue to see Europe and the US as key territories for luxury brands looking to expand. Many wealthy consumers from Asia and Africa want to make their luxury purchases in traditional luxury cities. They value the authenticity or added cachet offered by purchasing in Milan, New York and Central Europe, especially in Prague.
In 2015, the top European target markets for luxury brand expansion was Germany with 46% of luxury brands establishing a new, or increasing their current, presence in the country. France (38 %) and the United Kingdom (31 %) were close behind. Central and Eastern Europe increased by 18 %.
Germany, France and the United Kingdom remain critical for global luxury brands. The challenge is to find the optimum location in areas that are in extremely high demand. We have been solving this situation in Pařížská street in Prague.
Economically, the growth in personal affluence across the world has increased the need for global access to luxury products. With more people able to buy luxury goods, and luxury consumers willing to shop around (including travelling abroad) for the best deals and experience”, retailers have two key points of focus:
- The shopping experience Retailers are realising that they need to be more capable of adapting to the needs of overseas customers venturing to Europe and elsewhere. It is also not just about making specific purchases, consumers want to engage with the authentic brand experience that make them feel more valued.
- Growth into new markets
As wealth gets spread more evenly across the world, increasing number of countries will follow in China’s footsteps as major sources of luxury spending power.
*Source: Bain & Company 2015
CBRE Group, a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2016 revenue). The Company has approximately 75,000 employees and serves real estate investors and occupiers through approximately 450 offices worldwide (excluding affiliates). CBRE offers a broad range of integrated services including project management; property management; investment management; valuation; property leasing; strategic consulting and research and consulting. In the Czech Republic, CBRE has almost 350 employees and manages nearly 70 commercial premises with a total area nearly 1.2 mil. sq. m. Read more at www.cbre.cz.