Luxury Mainland revival

Retailers in the Mainland are seeing an uptick in retail sales pre-Christmas, particularly in the luxury segment, as the depreciation of the RMB diminishes purchasing power abroad, and luxury brands move to narrow the price gap between the local and overseas market.
“Some brands in China are expecting 2016 to go back to their peak in 2012, although the mix is different. I expect some brands will beat that record,” says Bruno Lannes, a partner in Shanghai-based consulting firm Bain, as quoted by Hellenic Shipping.
“Everyone is benefitting from more traffic at the Chinese (luxury shops),” Lannes told the publication, noting an estimated 4 per cent uptick in luxury sales in the Mainland after three years of decline.
“Some brands price their models in China closer to the overseas market, such as Chanel,” Emma Yu, a Shanghai shopper, told the publication.
Given the MSAR’s proximity to the Mainland, the depreciation, and subsequent return to, and purchases made by Mainlanders in their home country would negatively impact the luxury retail sales in the MSAR, which, according to the most recent data from the Statistics and Census Services (DSEC) show that retail sales of Watches, Clocks and Jewellery fell 21.2 per cent year-on-year ‘on account of slowdown in demand’, while the overall volume of retail sales in the third quarter dropped 5.9 per cent year-on-year.
Over 45 per cent of interviewed retailers expect their sales volume in the fourth quarter to decrease. Meanwhile, visitor numbers from the Mainland increased 0.4 per cent year-on-year in October, whilst over the first ten months of the year they fell 0.4 per cent, for nearly 17 million visitors during the period.