Men account for majority of spending in China’s luxury goods market

Men account for majority of spending in China’s luxury goods market

Men account for around 55 percent of China’s luxury goods market, well above the global average of 40 percent, according to research from brokerage CLSA.

The trend has been attributed to the gift-giving culture in China as businessmen regularly buy presents for potential associates and government officials.

Luxury goods companies benefit from this gift-giving culture, but they are also at risk of dips in sales as men are less likely than women to splurge on discretionary purchases in times of economic uncertainty, CLSA’s research indicates.

Mariana Kou, CLSA’s consumer and gaming analyst, said, “Men are not prone to impulse shopping. They tend to wait a little if the economy is pretty uncertain.”

Chinese shoppers account for one-fourth of all luxury purchases globally and last year surpassed U.S. consumers to become the world’s top spenders on luxury goods, according to consulting firm Bain & Co.

China’s economic growth slowed to a three-year low in the middle of last year and demand for luxury goods dropped suddenly, unsettling a global market worth $280 billion, according to Bain’s estimates.

However, China’s growth picked up to 7.9 percent in the fourth quarter of last year after seven straight quarters of weak sales.

The luxury goods market is set to remain strong through the first quarter of 2015 due to Chinese New Year celebrations in February and the National People’s Congress in March, where gifts will be bestowed upon new government officials.