Prada is listed as the number two luxury brand China’s millionaires aspire to buy in the next year, according to a recent report by Agility Research and Strategy. (Shutterstock)
Average luxury goods prices in China are 20 percent higher than the global average, according to new research.
LONDON, United Kingdom ? Average luxury goods prices in China are 20 percent higher than the global average, on constant currency, according to new research by Luca Solca, head of luxury goods at Exane BNP Paribas.
While price gaps in China have remained stable over the last few months ? with the Asian market sitting higher than the US and then Europe ? the difference has narrowed at some brands over the last year, such as Balenciaga (to about 25 percent) and Dolce & Gabbana (to about 50 percent). Meanwhile, the gap has increased for Brunello Cucinelli (to about 45 percent) and Armani (to about 75 percent). ?Several brands still have work to do to bring their premium to the 30-40 percent range considered sustainable,? states the report. Luxury brands remain conservative about reducing global price gaps because purchases made outside of home countries account for 30 percent of the market, adjusted for currency, and tourist spending habits are highly correlated to exchange rates. Foreign purchases account for more than 70 percent of sales in Italy and France, and more than 50 percent in the UK and Switzerland.
A continued interest in middle class consumers, who are informed about pr...