The Chinese buy a whole lot of luxury goods, as evidenced by the influx of luxury houses opening stores there. However, a recent report says the Chinese actually buy more overseas, mainly because of the high import duty and taxes in China. The World Luxury Association released a report in June revealing that the Chinese spent nearly $50 billion in Europe, four times what they spent on luxury goods in 2010 on the Chinese mainland. The report has prompted a debate on reducing China’s import duty on luxury products.
Because of rising disposable income and ever-increasing brand awareness, China is expected to surpass Japan by 2012 to become the world’s largest luxury consumer market, with an estimated value of $14.6 billion, according to the same report. So, as luxury brands are expanding in the east, they are keen on a tax cut. PPR, which owns Gucci, Bottega Veneta, and YSL, among others, is increasing Chinese consumers’ awareness of its brands with the launch of more new stores.
Gucci will have 12 new directly operated stores on the Chinese mainland in 2011, the biggest yearly increase since the premium brand entered the mainland in 1992. Six of them are already in operation as of this past August. Prior to 2004, Gucci only had four stores in the mainland. Since then, the number of Gucci stores has increased to 54.