China’s Luxury Consumer: Growing or on the Decline?

According to an article in today’s Wall Street Journal, luxury group Compagnie Financiere Richemont, the owner of Cartier and other watch brands like Piaget and IWC, reported lower than expected sales growth for its crucial pre-Christmas period thanks in part to flat trading (in constant currencies) in the Asia Pacific region.MC910216378 Apparently this slowing China performance follows a pattern of other companies reporting slowdowns toward the end of last year as Chinese consumers fretted over the change in government in Beijing and slower economic growth, states the article. A purchasing manager from one of the largest retail groups in China told the WSJ that sales had declined during the second half of 2012. The manager said the downturn was because the global economic malaise had affected China as well and had taken its toll on Chinese consumer confidence. He thought sales in 2013 would continue at a similar, lower level. Still, according to data from other research institutions, Chinese consumers remain interested in luxury goods like timepieces (the fancy name for expensive watches.) A survey from Digital Luxury Group showed an increase of 7.1% in 2012 online searches for high-end brands globally, with half of all the searches coming from Asia and the BRIC countries. That said, it doesn’t look like Chinese consumers have lost their appetite for luxe goods by any means. They just might be getting a bit more cautious about their purchases…for now.