"Wall Street Journal": Luxury gifts are losing their luster in China

"Wall Street Journal": Luxury gifts are losing their luster in China Because of a slowing economy and new surveillance methods for elite shopping, China's gift-givers are starting to become less...

British luxury goods giant Burberry warned on Tuesday that sales and profits fell as global market demand weakened, sending its shares down 21%. An important reason: Asia-Pacific market demand, especially the Chinese market, is no longer growing at the same rocket-like rate as before. Burberry said sales in the Asia-Pacific market rose 18% in the first fiscal quarter, which was half the growth rate a year ago.

China's slowest economic growth in nearly three years has curbed consumption. Overall, China's retail sales increased by 13% in August to 1.67 trillion yuan, compared with a growth rate of 17% in the same period last year. But analysts say other factors are also affecting the high-end luxury market, such as changing social climate and greater public scrutiny of the money spent by the wealthy. The rich and their mistresses have always been loyal consumers of gemstones and expensive leather bags, but according to a recent report from HSBC, the culture of having mistresses and lovers is gradually declining in China.

Luxurious gifts are a common practice among Chinese businessmen and officials, and are subject to public scrutiny. Aaron Fischer, an analyst at CLSA Asia-Pacific Markets, said such oversight has reduced demand for luxury gifts, such as jewelry and watches. The company said that 16% of consumers who purchased luxury goods from June last year to June this year admitted that these luxury goods were given as gifts for business cooperation.

China’s leadership has been calling on government officials to stop consuming luxury goods. According to Xinhua News Agency, in July, the Chinese government issued regulations prohibiting civil servants from misappropriating government funds to purchase luxury goods.