Luxury counselor Sage Brennan on China’s luxury spending

Global Business

Luxury counselor Sage Brennan on China's luxury spending.00_05_39_09.Still003

Chinese consumers have been the largest buyers of luxury products in the world over the last decade. According to Reuters, Chinese luxury spending accounts for as much as 45 percent of the global market. So can luxury brands afford a devalued renminbi. China’s triple yuan devaluation is expected to take a big toll on the global luxury sector, which has already been hurt by Beijing’s tough anti-corruption drive. Firstly with the yuan devaluation, goods sold in China converted into dollars or euros will now account for less and that will hurt earnings.

According to Deutsche Bank some of the companies that rely most on China for revenue are Swatch which gets 20 % of revenue from mainland china. China makes up 14 % of global sales for Ferragamo, Burberry and Gucci and around 11% for Hermes.

But keep in mind that more than 100 million Chinese travel abroad every year, buying more designer handbags, watches and jewelry than any other nation -in fact the Chinese spend more abroad on luxury goods than they do at home and their purchasing power just took a big hit – with the yuan weaker in relation to other currencies. And the bigger concern for luxury brands is how it affects Chinese spending outside China.

According to Deutsche bank here are the top brands relying most Chinese buyers globally. 49 % of Swatch’s sales comes from Chinese buyers and 41 % for Richemont. Ferragamo depends on Chinese shoppers for 38% of sales and Gucci and Hermes both 35%.

For more, CCTV’s Michelle Makori spoke to Sage Brennan, the Co-Founder of China Luxury Advisors.

Luxury counselor Sage Brennan on China's luxury spending

Luxury counselor Sage Brennan on China's luxury spending

Chinese consumers have been the largest buyers of luxury products in the world over the last decade. According to Reuters, Chinese luxury spending accounts for as much as 45 percent of the global market. So can luxury brands afford a devalued renminbi. China's triple yuan devaluation is expected to take a big toll on the global luxury sector, which has already been hurt by Beijing's tough anti-corruption drive. Firstly with the yuan devaluation, goods sold in China converted into dollars or euros will now account for less and that will hurt earnings. According to Deutsche Bank some of the companies that rely most on China for revenue are Swatch which gets 20 % of revenue from mainland china. China makes up 14 % of global sales for Ferragamo, Burberry and Gucci and around 11% for Hermes. But keep in mind that more than 100 million Chinese travel abroad every year, buying more designer handbags, watches and jewelry than any other nation -in fact the Chinese spend more abroad on luxury goods than they do at home and their purchasing power just took a big hit - with the yuan weaker in relation to other currencies. And the bigger concern for luxury brands is how it affects Chinese spending outside China. According to Deutsche bank here are the top brands relying most Chinese buyers globally. 49 % of Swatch's sales comes from Chinese buyers and 41 % for Richemont. Ferragamo depends on Chinese shoppers for 38% of sales and Gucci and Hermes both 35%. For more, CCTV's Michelle Makori spoke to Sage Brennan, the Co-Founder of China Luxury Advisors.