#MAPIC Asian downturn pushes luxury retail focus worldwide

Worldwide sales of luxury goods, led by the Chinese, continue to increase, according to the latest report by global property advisor CBRE.

Entitled Luxury Retail 2015, the report notes that 70% of all Chinese-led luxury purchases are now transacted overseas, resulting in sales increases in Western Europe of 13.4%, Eastern Europe 18%, Africa 26% and 5% in North America over the last two years.

'Chinese purchasers account for 30% of the luxury spend worldwide and 70% of these purchases take place overseas, showing that the downward shift in their economy has prompted Asian consumers to rethink their purchasing habits,' said Andrew Phipps, head of research EMEA at CBRE.

'The advent of the new '"anti-extravagance legislation'" in China and their consumers‘ growing awareness of price differentials of up to 70% has led to many preferring to make their purchases overseas, where the prices are far more attractive, Phipps said.

This shift in Chinese shopping habits is in turn providing opportunities for luxury brands to grow their presence across Europe and America, as they become the main hubs for luxury expansion over the next five years.

'We will continue to see Europe and the US as key territories for luxury brands looking to expand. Many wealthy consumers from Asia and Africa want to make their luxury purchases in traditional luxury cities. They value the authenticity or added cachet that purchasing in Milan or New York offers," Phipps added.

In 2015, the top European target markets for luxury brand expansion was Germany with 46% of luxury brands establishing a new, or increasing their current, presence in the country. France and the United Kingdom were close behind with expansion 38% and 31% respectively.

Phipps: 'Germany, France and the UK remain critical for global luxury brands. The challenge is to find the optimum location in areas that are in extremely high demand.'

Click here to download a PDF of the report