Well, the idea that Chinese consumers won’t be able to keep China’s economy growing at a fast pace took a hit Tuesday with a new report from a Beijing-based consultancy that said China accounts for nearly half of the world’s luxury consumption so far this year, reported state news agency Xinhua.
Only one big problem … Chinese consumers do most of their shopping outside of the country, where it does nothing to boost the Chinese economy.
Chinese are expected to spend $116.8 billion on luxury goods this year, accounting for 46% of the world’s total, said the Fortune Character Institute.
However, $91 billion worth of luxury purchases, or 78% of all Chinese luxury consumption this year, happened outside of China, a 12% increase over last year.
The institute estimates that the world’s luxury market will grow 11% this year to $255.2 billion.
Despite the Chinese appetite for luxury, the report also found that 83% of luxury brands have closed some of their retail outlets. The consultancy predicted closures will continue next year and more will focus on experience and service as more consumers opt to purchase online.
The emergence of luxury online retailers in China would seem a way to bring those shoppers back, but the institute said a survey of high net worth individuals in China suggests that only 4% of them are willing to shop luxury goods at domestic online retailers while 44% prefer buying at brands’ official websites.