Hong Kong most optimistic market in Asia-Pacific for luxury spending
Hong Kong is the most optimistic market in the Asia-Pacific region in terms of its luxury spending outlook; but the mainlanders still top the charts in terms of spending power and future growth potential.
A MasterCard Worldwide survey reveals that some three-quarters of respondents in Hong Kong plan to spend the same or more on luxury shopping in the coming months, ahead of those on the mainland, which came in second.
Hongkongers emerged as one of the top three luxury shoppers in terms of spending power, ownership and intention to shop. They plan to spend on average HK$34,055 on luxury goods in the coming months, much higher than the regional average of HK$27,800. But they are still behind the mainland (HK$40,147) and Japan (HK$36,520).
The spending power of mainlanders is affirmed in a separate study by The Boston Consulting Group, which concludes that the affluent on the mainland are expected to spend more than US$3 trillion annually by 2020 on luxury goods and services, travelling and dining, accounting for 5 per cent of total global consumption.
The study said that mainlanders with an annual household disposable income of US$20,000 or above will become the major driver of consumption growth, especially for premium products and services.
It forecasts that the number of affluent mainlanders - defined as the group richer than the middle classes but not as wealthy as high-net-worth individuals - will more than double to 280 million in 2020, or 20 per cent of the country's population.
The annual buying power of this segment may reach US$3.1 trillion in eight years, exceeding the total consumption in Germany and coming close to that of Japan, according to the firm's estimates.
"The affluent class is not only booming quickly, they also show the financial resources and willingness to purchase premium goods and services," said Vincent Lui, a BCG partner and co-author of the report.
Luxury goods retailers are likely to be the biggest beneficiaries from the trend.
According to the report, luxury spending by mainland consumers is expected to jump from the current US$40 billion to US$190 billion in 2020.
The affluent class is expected to replace high-net-worth individuals as the main buyers of big-brand items, according to the study, which was based on 3,000 mainland consumers.
It found spending by the affluent class on luxury goods only accounts for 5 per cent of that by high-net-worth individuals at present.
However by 2020, the former group will account for 75 per cent of total luxury sales while the super-rich will only make up 20 per cent.