Alibaba, Tencent Benefit From Luxury-Goods Boom
Luxury sales in China are expected to increase between 6% and 8% this year, presenting a big opportunity for ecommerce giant Alibaba Group and rival Tencent.
Thanks in part to increasing discretionary spending on the part of Chinese consumers, easy access to credit and a weaker yuan?, luxury sales have been picking up all year long. That growth is expected to continue with Bain Capital predicting a 6% to 8% increase in China this year, reported The Wall Street Journal.
Meanwhile according to a new report from wealth-tracking researcher Hurun Report and advertising media planning company MEC, millionaires in China are projected to spend $58 billion in high-end gifts by 2020, purchasing everything from expensive watches to upscale overseas trips. That would mark a 30% increase from this year with the wealthy spending their money to impress their families and business associates. The report, “China’s High Net Worth Individuals Gifting White Paper 2017,” also found the well-heeled are spending money on gifts for themselves. Luxury goods top the list, with the survey showing 60% of respondents said they are more likely than in the past to gift a upscale good. (See also: Global Luxury Retail Earnings to Double This Year: Moody?s.) The Role of Mobile Phones
While many consumers in the U.S. tend to purchase their high-end goods in stores or from a personal computer, a lot of the sales transactions in China are coming via mobile phones. With luxury brands wary of ...
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