More Mainland Chinese are traveling overseas, buying luxury brands, says KPMG
71% of Chinese polled traveled overseas in 2012, compared to 53% in 2008
60% of respondents prefer Hong Kong, Taiwan, Macau for cosmetics, perfumes
20% of those polled said they went to Europe in 2012, up from 3% in 2009
More Mainland Chinese travelers are jet-setting to foreign shores and global luxury brands are cashing in, according to a new survey by KPMG, the global auditing firm.
The report also revealed that rising Chinese incomes are fueling demand for luxury goods right at home in the domestic market.
The findings from KPMG’s “The Global Reach of China Luxury” echo reports over the past several months that show Chinese consumers are able – and willing – to pay more.
An HSBC report in September estimated that 25% of the world’s luxury purchases were made by Chinese nationals – a jump up from a 5% market share in 2007.
The global management firm McKinsey & Co. reported in December that Chinese consumers had become the prime engine of growth for the luxury sector, surpassing Japan, which had long been the world’s largest.
By 2015, McKinsey & Co. predicted China’s luxury market would account for one-fifth of global sales with a value of $27 billion.
The number of Mainland Chinese consumers polled who traveled overseas in 2012 climbed to 71% – a “significant change” from 53% in 2008, the KPMG report said. Of those travelers, 72% said they bought more high-end products such as handbags, cosmetics and watches.
This rising tide of Mainland Chinese travelers means that global luxury brands need to take another look at their business strategies in order to take advantage, said Nick Debnam, KPMG China’s Asia Pacific Chairman of Consumer Markets.
“It is no longer just about doing business in China… brands need to therefore align their branding and marketing strategies both in China, and for those rising number of travelling Chinese consumers,” Debnam said in the report.
A majority of respondents – 60% – said Hong Kong, Taiwan and Macau were their favorite places to go to pocket perfumes and cosmetics. One-fifth of respondents said they went to Europe in 2012, up from 3% in 2009.
Mainland Chinese are also recognizing more global brand names – 59 in 2012 compared to 34 in 2006 – and have attached specific sentiments to products based on their country of origin.
Most respondents – 89% – ascribed “romantic” feelings to French products, while 72% said German products were known for being “precise.” Four out of five respondents linked the idea of “long history” to Mainland Chinese goods; just 15% attached the same sentiment to U.S.-manufactured items.
The KPMG report noted that “China is not without its challenges” but despite the global economic slowdown the country’s “consumer sector continues to grow and also accounts for an increasing share of global sales for some of the world’s largest luxury brands.”