Come on, New York, move over! Shanghai has now overtaken the Big Apple as the global centre of wealthy consumers who purchase high fashion and luxury labels, with the Chinese metropolis’ most fashionable residents far outspending their New York counterparts.
According to a Milan based study amongst luxury shoppers by digital direct marketing firm ContactLab, Shanghai’s shopaholics spent an average of US$1,000 on their last purchase – double that of the average New Yorker. In addition, four out of five Shanghai residents said they purchased at least one luxury item over the past 12 months. On top of that, 91 percent of luxury shoppers surveyed in Shanghai said they plan on spending a similar amount in the next six months, whereas only 77 percent of such New Yorkers said they would be splurging on high end goods. Moreover, Shanghai’s fashion conscious plan to shell out, on average, 66 percent more on luxury items than their New Yorker counterparts.
These numbers aren’t so surprising, considering that Morgan Stanley estimated Chinese travelers will top the list of luxury spenders by 2015, thanks to their expanding middle class. But, luxury sales still aren’t what they used to be. The state run newspaper Global Times cited a report from China’s Ministry of Commerce that said, in the first four days of the Spring Festival holiday, marked by the beginning of the Lunar New Year, consumer market sales for luxury goods took a hit. Sales of luxury items like expensive alcohol, rare seafood and leather goods, which are often exchanged as gifts to coworkers or friends during the holiday, fell sharply. In one pocket of malls in Fuzhou, the capital of the eastern coastal province of Fujian, luxury alcoholic beverage sales fell by 70 percent compared to the year prior during the first four days of the holiday.
The slowdown in luxury purchasing is attributed largely to the central government’s year old austerity drive. At the beginning of his presidency, Xi Jinping cut back on unnecessary spending on luxury items and services that are typically the province of senior Chinese officials. With luxury spending now somewhat taboo at home, many Chinese have just resorted to spending their wealth while overseas. With more and more Chinese heading overseas for schooling, business or holidays, their money is still often spent on luxury items. In fact, in New York, many of the upscale stores that dot Fifth Avenue are employing Chinese speaking people on sales floors. Separately, the ContactLab survey unearthed some other interesting differences between luxury shoppers in Shanghai and New York. “Fashion buying in China is closely linked to the display of one’s own spending capacity, while the New York consumers show greater affection for brands”.