Slowing growth of the second largest economy and the world’s biggest luxury consumer is threatening a luxury consumption boom. Spending more than tripled over the last 20 years to reach $300 billion in 2013.
The share of around 130 million luxury market consumers comes to emerging market, where 50 million refers to China, according to US consulting firm Bain & Co. Each year the auditory of excellence lovers grows by 10 million, while the existing consumers attack luxury shops with a new eagerness.
The rich in China that provides for about 30 percent of global luxury revenues has cut their spending 15 percent in 2013, according to Hurun Report, the survey of Shanghai-based publisher.
Luxury accessory brands such as Cartier jewelry and Montblanc pens as well as elite alcoholic drinks manufacturers like Remy Martin cognac also pointed to a falling demand from Chinese customers.
“Their major customers are Chinese consumers, for which spending is indeed slowing down significantly,” as Bloomberg quotes Arthur Kwong, the Hong Kong-based head of Asia Pacific equities at BNP Paribas Investment Partners, which manages about $650 billion.
The growth of the second largest economy slowed to 7.4 percent last quarter, compared with 11.9 percent three years before. Meanwhile the retail sales in Hong Kong nosedived 9.8 percent in April, representing the biggest year-on-year drop since 2009.
Revenue growth in the casinos and betting shops of the special gambling zone in Macau fell two-thirds in May to 9.3 percent compared to four-year monthly average of about 34 percent.
Still the S&P Global Luxury Index of 78 companies shows positive results and is trading within 2 percent of a record having more than doubled over the past four years.