Many Chinese consumers travel to Japan, Hong Kong and even to Europe and the US to procure the latest luxury items. Over one-half of all spending on luxury items by Chinese consumers is actually rung through tills in Hong Kong and Macau rather than on the mainland. This is due to the heavy import taxes consumers face on luxury goods bought in China. Indeed, owing to these hefty import taxes prices of a basket of 20 luxury brands of watches, suitcases, clothing, liquor and consumer electronics are 45% higher in mainland China than they are in Hong Kong, 51% higher than in the US and 72% higher than in France, according to a 2011 study by the Ministry of Commerce.
Consumers are not using internet retailers when buying luxury goods as often as they do when they buy other types of products. A McKinsey survey, conducted in 2011, found that 44% of consumers in China said they preferred to see, hold and try on items before purchasing. Thus, they avoid internet retailers other than to conduct research and check prices. As well, many consumers tend to not trust internet retailers to provide buyers with the genuine articles, an issue that is slowly being resolved as e-commerce develops in China.
Amy for Daxue Market report China