Spending on luxury falls on mainland

China remained the world's largest consumer of luxury products last year even though domestic sales fell for the first time due to the government's anti-corruption campaign and increased spending overseas.

Chinese spending on luxury goods increased 9 percent to 380 billion yuan (US$61.3 billion) in 2014, accounting for 30 percent of global spending, according to Bain & Company's 2014 China Luxury Market Study.

However, sales of such products on the Chinese mainland fell 1 percent from a year earlier to 115 billion yuan, the consulting firm said yesterday.

"The mainland's market fell for the first time as the continued impact of anti-corruption and frugality campaigns undermined luxury gifts and economic slowdown also exacerbated the issue," said Bruno Lannes, a Bain partner and author of the study.

Sales of watches and menswear on the mainland fell the most by 13 percent and 10 percent respectively, while purchases of women's clothing grew 11 percent.

Customers who bought their luxury goods while abroad contributed to 55 percent of Chinese luxury spending last year, with Japan and South Korea the hottest destinations due to exchange rate advantages and easier visa applications.

Daigou, or overseas purchases of luxury goods via friends, relatives and agencies, accounted for 15 percent of total spending last year.

"The daigou market has grown quickly, mainly aided by increasing number of bargain-hunters who are more aware of price differentials and development of professional daigou agencies and cross-border logistics firms," Lannes said.

Of 1,400 consumers surveyed by Bain, 70 percent said they have purchased luxury goods via daigou and 59 percent expected to spend more in this way.

Meanwhile, China's emerging free trade zones are expected to fuel cross-border e-commerce in the luxury market with their cost-saving advantages, the firm said.