China's luxury goods consumption cools: survey

SHANGHAI - The Chinese mainland's luxury goods market has slowed from seven-percent growth in 2012 to around two percent in 2013, according to the "2013 China Luxury Goods Market Study" released on Tuesday in Shanghai.

The survey, conducted by the international consulting firm Bain & Company, forecast that the country's luxury goods consumption will experience similarly slow growth in 2014.

Several factors have generated a cooling of this previously exuberant market domestically, according to the Bain study.

The government campaign encouraging frugality and cracking down on corruption across the country has had a heavy impact on gifting, which had been one of the major growth engines for the sector, said Bruno Lannes, a Bain partner in Greater China.

The campaign especially constrained the growth of luxury watches and men's categories, according to Lannes, adding that watches make up over a fifth of the total domestic luxury goods market, and their sales have declined by 11 percent in 2013.

The survey estimated consumption of luxury goods in the Chinese mainland at 116 billion yuan (19.1 billion U.S. dollars) in 2013. Chinese buy more luxury goods than any other nationality, with their purchases making up 29 percent of the global market.

However, Chinese shoppers do two-thirds of their luxury shopping abroad, triggering a slowdown in store traffic and store openings domestically, according to the survey.