Nov 26, 2015 (China Knowledge) - More luxury outlet shutdowns are looming ahead in China in 2016, as over 95% of top luxury brands may further close some of their outlets, but set up customer experience and service centers instead, said a report released by Fortune Character Institute, a Shanghai-based luxury lifestyle research and consulting group.
According to estimates of the luxury research firm, 83% of luxury retailers scaled down their expansion in China in 2015. Over the past few years, Italian fashion house Prada SpA has shut down 16 outlets in China, while Chanel and Burberry closed 11 and 3 outlets, respectively.
Zhou Ting, director of Fortune Character Institute, held that the golden era has gone for luxury retailers in China, as Chinese consumers are focusing more on design and quality rather than logos, and are more willing to shop overseas for bargains.
Chinese consumers are expected to spend RMB 740 billion on luxury goods this year, representing 46% of the global total, said Fortune Character Institute.
Nevertheless, RMB 91 billion worth of luxury purchases, which constitutes 78% of all Chinese luxury consumption this year, were made outside of China, a 12% rise over a year earlier.
According to the 2015 China Luxury Industry Development Report released on FT.com, duty-free shops, and overseas and domestic franchise stores were top three favorite channels for Chinese consumers to buy luxury goods in 2014, with buying overseas the most preferred channel.
Zhou Ting predicted that China will be one of the cheapest places in the world to buy luxury goods, as the Chinese government may further cut the import tariff on such items next year, and use a variety of policy instruments to curb shopping overseas.