Hongkongers cut spending on luxury goods amid bleak mainland outlook
Bleak outlook for mainland economy prompts change in buying patterns
Hong Kong consumers plan to cut back spending on luxury goods in the next 12 months in the face of a bleak outlook for the mainland economy, a survey shows.
About 2,000 people who had bought luxury items in the past 12 months, 15 per cent of whom live in Hong Kong and the rest are from first-, second- and third-tier cities on the mainland, were polled in June.
"There will still be growth in the luxury market, but the momentum is downward," said Simon Tye, executive director of Ipsos, a market research company that conducted the survey with global communications firm Ruder Finn.
Tye said there would be a significant change in the kind of items purchased. "Last year, a husband might buy diamond for his spouse, but this year, he might buy some cosmetics," he said.
The survey showed luxury handbags, jewellery and brand-name watches would face a difficult period: 54 per cent of the mainland respondents said they would spend less on watches, and 48 per cent said they would cut spending on the other two categories.
However, 43 per cent said they would spend more on shoes.
But Hongkongers now have a poor appetite for almost all categories of luxury products.
"It is not that people have no money; it is that they don't spend amid the weak economic outlook on the mainland," Tye said.
Jean-Michel Dumont, chairman of Ruder Finn Asia, said luxury brands should continue to open stores on the mainland.
Mainlanders were buying more luxury goods at home, the survey found. "Many of the luxury brands are opening up in second- and third-tier cities, and the local people can purchase at a store near their home," Dumont said.