download - French Chamber of Commerce and Industry in Hong Kong

Consumer Brands & Retail
Global luxury goods – Equity
March 2013
abc
Price comparison against France: the mainland usually pricier than other Asian markets (prices taken in February 2013)
UK
France
US
India
Hong Kong
Singapore
Japan
Malaysia
Macau
Vietnam
Taiwan
Thailand
South Korea
China
Indonesia
Louis Vuitton Speedy 30
-0.3%
13%
16%
18%
18%
22%
23%
23%
24%
24%
28%
29%
32%
33%
France
US
Japan
UK
South
Hong Kong
Taiwan
Macau
China
Thailand
Singapore
Malaysia
Prada BN2274 tote bag
0.5%
9%
11%
14%
28%
31%
34%
37%
41%
46%
50%
Cartier Tank Anglaise W5310014
-13%
-12%
Japan
Hong Kong
-12%
Macau
-9%
Indonesia
-9%
Malaysia
-7%
US
-6%
Taiw an
-3% Singapore
France 0%
India 0.3%
UK 1%
Thailand 2%
South Korea 5%
Vietnam
China
9%
18%
-10% 0% 10% 20% 30% 40%
0% 10% 20% 30% 40% 50% 60%
-20% -10% 0% 10% 20%
Source: Company data, HSBC calculations
For instance, the 28-40% tariff that was levied on
imported watches until the end of 2004 was cut to
12.5% and then further reduced to 11% as of end
2006. Although eventually import tariffs should
theoretically disappear and should thus constitute a
positive risk for the sector, for the time being
mainland China is still a tougher place to do business
than some others.
Other reasons why the Chinese prefer shopping
abroad include:
Holiday indulgence: Most people will be
keener to spend during holidays, whether on a
restaurant meal or a handbag, all the more as
low-cost airlines increasingly allow savings on
travel costs.
Gift-giving: Gift-giving is an important
tradition in some Asian countries, like Japan
and China. In China, reciprocity underlies giftgiving,
and holidays are one of the many
occasions that trigger the offering of gifts.
Snobbery: Overseas purchases reinforce
status. Beyond the shopping experience,
purchasing luxury goods abroad can enhance
a traveller’s apparent status. It also shows
that one does not buy counterfeit items. This
gives the Chinese customer a sense of
belonging to an international, yet more
exclusive and sophisticated group of
customers.
Quality assurance: Another reason mainland
tourists prefer to shop abroad is for the
assurance that they are buying authentic, high
quality products. With the prevalence of
counterfeit goods in China, we believe
Chinese consumers can feel more assured
that the products they purchase are what they
claim to be when they purchase those items
in, say, Hong Kong. For jewellery in
particular, measures can be taken to provide
quality assurance to customers.
Better shopping experience: The product
range can be different from one region to
another: it is not uncommon to find in Hong
Kong the rarer designs of Swiss watches or LV
handbags that cannot necessarily be found on
the mainland. Product collections can be wider
abroad. The product assortment and the service
that goes with it (ie knowledgeable staff) are
other reasons to shop outside the mainland.
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