Sep 20, 2016
Luxury goods purchases bounce back strongly in London
Sep 20, 2016
Purchases by international tourists, which account for nearly one third of world luxury goods sales, continued to slump in August, though at a slower rate than before thanks to a massive rebound in the UK.
According to figures by Global Blue, a tax-free sales specialist, tourists have flocked to the UK to profit from the weak pound and buy luxury goods. Their purchases last month jumped up by 36% compared to the same period last year.
France, the top tourist destination in Europe, has conversely been heavily affected by the string of terrorist attacks. Foreign tourist purchases there have continued to plummet in August (-20%, after -23% in July and -15% in June), while the decline was less strong in Italy (-11%, after -23% in July).
Purchases by Chinese customers, who account for approximately 40% of the world luxury goods market, have once again decreased, falling by 14.6% in August after a -25.6% in July.
The Chinese are very sensitive about security issues and have increased their domestic expenditure, but not enough to make up for the decline in purchases abroad. They have also been encouraged by the lower domestic price differential compared to Europe, and by taxes and increased constraints adopted last April by the Chinese government to fight against the 'daigu' parallel market: Chinese buyers who sell off cheaply authentic luxury products bought in Europe.
The figures published by Global Blue do not take into account purchases made in the USA, Hong Kong and Dubai, where tax-free operations do not exist
According to the analysts' estimates, the decrease is still above 10% in Hong Kong, once the most profitable city for luxury goods. The Chinese are now rushing to South Korea (+31% in August), which they regard as especially attractive in terms of shopping experience and range of brands, and they are turning their backs on Japan (-36%) owing to the yen's appreciation.
Overall, duty-free tourist purchases in August have limited their decline to 5.2%, after a 16% downturn in July and June, also thanks to increased expenditure by US customers (+7.2%), after five negative months in a row.
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