Spending on luxury goods by Chinese shoppers abroad fell last month for the first time since such records began in 2010, leading to the worst ever monthly result for the luxury goods industry’s tourist sales, retail tax-refund services company Global Blue said on Friday.
Spending by Chinese tourists in March tumbled 24 percent, dragged down by a 35 percent year-on-year drop in Europe, where the Paris and Brussels attacks have kept some tourists away. A reduction in the price gap with Europe has also lifted spending within China.
“The slowdown in Europe is due to a tougher comparison, the impact of the terrorist strikes and the effect of the introduction of biometric visas, although the overall growth of the Chinese consumer globally has slowed and remains a concern,” Barclays analysts said of the figures.
Global Blue data showed that overall tourist spending on luxury items fell 14 percent in March after rising 4 percent in February.
The firm’s figures do not include tourism spending in the United States, Hong Kong and Dubai, which do not have value-added tax refund systems.
Luxury goods industry leader LVMH and British luxury fashion brand Burberry both said this week that they had seen a drop in tourist spending in continental Europe.
For some big luxury brands such as Cartier and Louis Vuitton tourists account for more than 50 percent of customers in certain European markets. Chinese consumers account for almost a third of the global luxury goods market.
After the attacks on Brussels and Paris, LVMH said there had been fewer visitors travelling to Europe “from the East”, its term for Russia and Asia. Burberry added that tough market conditions would hit profit in the year ahead.
Global Blue said Russian tourist spending fell 22 percent last month, weighed on by a drop in the value of the rouble and the weak home economy which has been hit by lower oil prices and continuing international sanctions over Ukraine.
Last week consultancy Bain & Co forecast that the luxury goods market would reach a low point this year, due to lower levels of tourists travelling to Europe, depressed trading in Hong Kong, weaker demand in China and a relatively subdued U.S. market.
By Astrid Wendlandt and Pascale Denis Courtesy Reuters