Chinese luxury consumers may have to dig deeper into their pockets for luxury goods and services according to results of this year’s Hurun Luxury Consumer Price Index. The annual survey, which was released this month, indicated that the price of luxury goods bought by China’s wealthiest group rose 4.94 percent, 2.72 percent higher than the national Consumer Price Index, which serves as a major gauge of inflation.
The slowdown in the economy has knocked the confidence of the Chinese luxury consumers,” said Rupert Hoogewerf, chairman and chief researcher of Hurun Report. Despite this, Chinese consumers are clinging to their high priority purchases.
According to the Hurun Luxury Consumer Price Index, prices continue to rise in these areas:
Luxury Travel, 11.92 percent price increase this year. “Although the cost of luxury traveling is going up, I still prefer to spend a large amount on it, traveling around the world with family or friends from time to time, for relaxation and to get away from the grind of work,” said Yu Zhiwu, the young millionaire owner of a trading company in Wenzhou, Zhejiang province. Yu expects to spend 1 million yuan ($157,500) on luxury travel this year.
Education, 7.58 percent increase this year. Chen Xiuqing, a property developer in Wenzhou, considers some of his most important luxury spending to be sending his daughter to a British boarding school. “I want my daughter to get a superior education in manners and practical abilities, which she probably will fail to learn if she continues studying in China,” said Chen. He sent her to Queenswood School, a private, girls-only Methodist school in Hertfordshire. Chen said the tuition cost 10,000 pounds ($15,900) a semester last year, including accommodations, a figure that rises with each year. “Compared with other private schools, which have lower requirements, there are more local students from high-class or well-educated UK families and fewer international students like my daughter,” said Chen.
Watches and jewelry, 6.25 percent price increase this year. “The prices of luxury goods keep increasing, but the demand for giving gifts to friends and business partners continues growing too,” Yu said. Yu spends 600,000 yuan ($94,595) a year on luxury products for himself, but spent 1.4 million yuan ($220,722) on friends and co-workers.
Other prices that are quickly rising include high-end wines and cigarettes (up 7.84 percent), yachts and jets (up 2.14 percent), and private chartered flights (up 7 percent). The only field that saw decreased prices was luxury property, which dropped 2.42 percent thanks to relaxed government restrictions.