Chinese Consumerism – Luxury Goods “DOWN” Canned Air “UP”

Chinese over the past several years have kept the global consumption of luxury goods at record high levels.  Chinese been the primary force behind the growth of the luxury market, but recently this increase has been in decline.

China’s luxury market slides 2% to 113b yuan in 2015 – China Daily 13th April 2016

http://europe.chinadaily.com.cn/epaper/2016-06/03/content_25600223.htm

Sales of luxury goods in China declined slightly last year (2015) to 113 billion yuan ($17.2 billion; 15.4 billion euros) from 115 billion yuan in 2014, consulting firm Bain & Co says.

Overseas luxury consumption by Chinese down 24% in March – China Daily 27th April 2016

http://europe.chinadaily.com.cn/business/2016-04/27/content_24888259.htm

According to GlobalBlue, a tax return service company, overseas spending on luxury items by Chinese tourists declined 24 percent in March. This is the first time that number has fallen since records started being kept in 2010. In the European market, luxury consumption saw a year-on-year decline of 35 percent in March.

The effort to control spending of public money on fancy cars, name-brand handbags and expensive liquor got serious around the end of 2012. A government discipline commission probed or punished more than 182,000 people over corruption in 2013 alone, business consultancy Global Risk Insights says.

Is the reduction a direct result of the Chinese government allocating less public money to banquets and other ostentatious extravagancies and shopping and gambling sprees to Hong Kong and Macau, which are now just not possible.

Luxury spending grew only 2% in 2013, down from 7% in 2012, and it declined 1% last year, according to Boston-based management consulting firm Bain & Co.

Reference;

https://www.thestreet.com/story/11800288/1/banquets-go-under-the-table-in-china-squeezing-food-and-beverage.html

https://www.thestreet.com/story/11772314/1/hong-kong-luxury-sales-explode-on-mainland-tourism.html

https://www.thestreet.com/story/13106109/1/china-is-cutting-back-on-foreign-luxury-goods–heres-why.html

Luxury and ostentatious extravagancies have disappeared… or have they?  Has the spending shifted to different areas?  With the amount of Louis Vuitton handbags been sold over the past several years, VL Handbags and other luxury items must be at a point saturation where every Chinese has one and are no longer something special.

Not to mention the counterfeits which Jack Ma famed billionaire and owner of Alibaba has stated, “Chinese fakes are better than the originals” on the 14th June 2016 in a speech at Alibaba’s HQ.  So much for intellectual property and brand value.

Chinese tourists continue to spend up big in Australia – China Daily 1st June 2016

http://www.chinadaily.com.cn/travel/2016-06/01/content_25575659.htm

The latest International Visitor Survey commissioned by Tourism Research Australia (TRA) revealed international visitors to Australia spent 37.9 billion Australian dollars ($27.59 billion) in the year ending March 2016.

The numbers reveal a significant increase on the previous year, up 17 percent or 5.4 billion Australian dollars ($3.93 billion).

Chinese tourists increased the amount they spent in Australia by 38 percent to 8.9 billion Australian dollars ($6.47 billion).

Their patronage to Australia also increased by 23 percent and as well the amount of nights they stayed in the nation by 15 percent.

Big spending Chinese is great news for Australia providing the tourism that Chinese are supporting doesn’t stop.  So where are Chinese now spending their money?  Most reports suggest Australian health and nutrition.  Australian and New Zealand infant powdered milk have certainly benefited as well as made in Australia cosmetics, but what else?

Australian entrepreneurs sell cans of clean Australian air to China – SMH 2nd May 2016

http://www.smh.com.au/small-business/entrepreneur/australian-entrepreneurs-sell-cans-of-clean-australian-air-to-china-20160502-gojw1x.html

China’s breathtaking appetite for all things  Australian – iron ore, real estate and baby formula – has gone sky high.

Now Chinese people could soon be getting a taste for Australian air, if two Sydney entrepreneurs have their way.

John Dickinson and Theo Ruygrok have devised a way to bottle the air we breathe freely and are selling cans of pure Blue Mountains atmosphere for $18.80 each.

Well, there is nothing new here as there have been news articles reporting budding Chinese entrepreneurs exploiting canned air in Beijing since 2013.  It seems there are no boundaries as to what can be sold to the new Chinese wealthy looking for eternal health and longevity.

So let’s look at the air quality index for Australia versus China, is there really a significant difference and are the figures presented on the relevant reference web site’s accurate?

Table of AQI figures from 11th to 17th June 2016;

AQI Index 17 June 2016 JPEG

Reference;

www.enviroment.nsw.gov.au

www.pm25s.com/en

www.epa.vic.gov.au

In this table you can clearly see that the best air quality in the period 11-17th June 2016 was in Sanya with an average AQI of 39.  Melbourne was not far behind Sanya with an AQI of 42 and my current place of residence Dongguan, a key manufacturing hub of China with an AQI of 58 followed by Sydney (Downtown East) with an AQI of 61.  Both Beijing and Shanghai showing fair and poor AQI ratings which are to be expected, but Latrobe Valley in eastern Victoria, Australia coming in with a fair rating.

The moral of this story is, if the marketing machine is good enough and people don’t know what they have in their backyards, you can indeed sell ice to Eskimos!

It seems the right business venture would be to can air from Sanya, but I am Australian, so I do hope Chinese continue this idealistic shopping journey for all things healthy and natural and buy Australian.

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