Reflecting, no doubt, the burgeoning growth of the Chinese middle classes, the price of luxury goods and services in China grew two and a half times faster than the general consumer price index in 2016, a continuation of a long-term trend, a new study has shown.
According to the latest Luxury Consumer Price Index, from researcher Hurun Report, the prices paid by luxury consumers for a basket of 124 luxury goods and services rose 5.1% last year, compared to the standard CPI, as measured by the Nation Bureau of Statistics, which increased 1.9%.
Over the ten years the Hurun Report has measured the Luxury CPI, it has increased by 75%, again more than twice the rate of growth of the standard CPI.
Around 60% of the products monitored increased their prices last year, while 24 remained unchanged and 26 were lower.
“Luxury property, health and education drove up the Luxury Consumer Price Index this year, coupled with a decrease in the value of the Chinese Yuan against most of the major currencies,” said Rupert Hoogewerf, chairman and chief researcher of Hurun Report.
The price of luxury homes increased 13%, driven by a 57% surge in one location – Shenzhen. Luxury healthcare was up 11.7%, with health check-ups seeing the greatest growth at 34%. And top school tuition fees increased for the tenth consecutive year, up 6.2%.
More modest price increases were registered at a further six of the eleven categories covered in the research.
Luxury travel was up 5%, as was the wedding market; watches and jewellery increased 3.9%; luxury accessories and cosmetic products were up 2.9%; leisure and entertainment edged up 1%; jets and yachts reported a similar increase, although this did little to offset a 10.5% decline last year.
Two categories – luxury liquor & tobacco and luxury cars – had declined for two consecutive years, by 0.2% and 1.3%, respectively.
MOP says: No doubt the spending growth from these consumers will also feed into, for example, continuing Chinese investment into quality Australian property and stocks.
Smart luxury goods manufacturers will increasingly be looking to the Chinese market to boost sales at good margins … the growth of good Free Trade advice available to Aussie companies will also help local manufacturers to take advantage of the opportunities.