Chris Eng draws a link between the aggressive luxury shopping habits of mainland Chinese tourists in Malaysia and the disgraced politician in China.
Christmas and New Year are the season of shopping in Malaysia, regardless of one’s religious tendencies. Just make a quick trip to your nearest shopping mall to catch a glimpse of Malaysians in one of their three favourite pastimes (the other two being eating and griping about politics).
Over the past few years however I had heard of complaints amongst some of my well-heeled associates about how luxury shopping in Malaysia was a bit of a chore. Why? Aside from having to compete with rich oil sheikhs and their wives from the Middle East, the average upper class Malaysian had to face competition as well from the mainland Chinese tourist whose wallets and purses seemed to overflow with funds for luxury goods.
While I may be slightly exaggerating and the situation in Malaysia hardly compares to what happens on Bond Street or the Champs Elysees, no one can dispute the immense spending power some mainland Chinese tourists have demonstrated over the past few years. Stories of such persons buying 10 luxury handbags or more at one go are common and in some cases, all 10 bags were of the same design. With Asia Pacific now comprising 20% of the world’s luxury market and having 3.4 million high net worth individuals against the world’s total 11 million, luxury goods consumption in this part of the world should continue to rise.
All this has led to some of their less well-to-do compatriots getting up in arms with China’s gap between the rich and poor soaring to the highest levels since the 1950s. With China’s wealth Gini coefficient at above 60 compared to Malaysia’s 40+, it is not surprising that one of the key focus areas of China’s new government is to tackle this income inequality.
However, over the past few months, the trend for extreme luxury shopping by Mainland Chinese seems to have abated somewhat. The cause of this supposedly stems from the July 2011 high speed train crash in Wenzhou. The subsequent uproar over the crash and its causes led to greater efforts to stamp out corruption in China. This in turn led to much less ostentatious displays of wealth amongst Government officials. Gifts of luxury watches and bags that were previously worn prominently were now spurned to avoid accusations of corruption.
With the recent developments surrounding former political leader Bo Xilai, who was stripped from all Chinese Communist Party posts and expelled from the party, the aversion to prominent displays of wealth by government officials in China has been elevated to even higher levels. All this has meant that Chinese shoppers are now more likely to just buy their own luxury handbag, watch or jewellery rather than carry out mass luxury shopping with the aim of handing out gifts upon return to China. It will be interesting to see if end of reason reports from luxury goods outlets in Malaysia bear this out.
Whether any of this is true remains to be proven but the view was communicated to me by a well respected political and economic analyst with a keen eye for China. So we may continue to see the luxury market growing in Asia Pacific just purely from the organic rise in the number of wealthy but the days of mass buying in the stores of LV, Coach and Ferragamo at our high-end KL malls, and throughout Asia, may be less evident going forward.
So if you’re going to step out to your neighbourhood high end shopping mall and are hoping for less competition with a Mainland Chinese tourist for the attention of your luxury shopping attendant, spare a thought for the Chinese government official that may just be getting less gifts this year.
Photo credit: Flickr user RobertStockdill