super rich

Who Buys Our Luxury Goods, And Where Do We Buy Ours?

When it comes to the inflows and outflows of luxury goods by country, European countries such as Italy, France, Spain, Switzerland and the UK benefit from “massive inflows and low outflows”, whilst Hong Kong and Macau “are like Europe on steroids”, according to an analysts’ note from BNP Paribas Exane produced in association with digital marketer Contactlab.

French, Italian and Spanish consumers buy 85-95% of their luxury goods in their own countries, the report reveals, but 70-80% of the luxury goods sales in those countries are made by foreigners. This is due in part to a weakening euro.

France produces 7% of the world’s luxury goods, Italy 7%, and Spain 1%.

In Britain and Switzerland, the same pattern can be seen, although less extreme. 50-55% of luxury goods sales are made by non-residents with Swiss and British consumers purchasing 80-85% of their luxury goods domestically.

In Hong Kong and Macau, it’s the same pattern as in Southern Europe, only “on steroids”. 80% of luxury goods demand is satisfied domestically, but an incredible 90% of all luxury purchases are made by foreigners.

This is in spite of the fact that Hong Kong and Macau have seen their share of the global luxury goods market fall from 37% in 2013 to 25% by July 2016 – still a phenomenal statistic when the physical size of the regions in question are so comparatively miniscule.

Most of the purchases made in both Hong Kong and Macau are made by Chinese, although the country’s mass affluent classes have begun to diversify away from Hong Kong, where they had been spending as much as 70% of their luxury goods dollars in 2014 – that figure is now closer to 35%.

In terms of who spends the largest proportion of their luxury goods dollars abroad, its Russia, at around 66%, followed by China, which “sees virtually zero inflows”.

In the United Arab Emirates and the Gulf region, the split is almost exactly 50/50 – UAE and Gulf nationals buy almost half of their luxury goods abroad, whilst selling half of their domestically produced luxury goods to foreign buyers. Middle Eastern consumers apparently “spend a significant amount of their luxury goods dollars in Europe”; the region is responsible for 3% of all global luxury sales.

Brazil, India, Mexico and Taiwan spend two thirds of their luxury goods dollars domestically, with between 5-15% of domestic goods bought by foreigners.

The USA, Japan and Korea “have relatively limited interchange with the rest of the world”, BNP’s data shows, although China is spending more in the latter two countries thanks to a favourable exchange rate. The USA accounts for a sizeable 31% of the luxury goods market.

Spending on international luxury items is not slowing down either, despite analysts’ fears that 2016 would experience a downturn.

Are you planning on making an overseas purchase? To discuss saving up to 85% on the rates a bank will charge to process your overseas payments, why not try our price comparison service? If you like the rates we can provide for you, get in touch!

Comparison tool

J Abrahams

I sold some artwork in New York and needed to get my funds back to the UK. I saved over £12,000 over the quote given by my bank

V Piccciani

Everything went great. The money is in the account in Brazil exactly the amount we agreed, very fast and safe, thank you very much for the service
International payments - overseas money transfers

INTERNATIONAL MONEY TRANSFERS FOR BUSINESSES

As a business, making global payments involves many risks, including exchange rate risk. If you are making regular transfers the cumulative costs due volatile exchange rates can be excessive. We can empower you to make International Payments cheaper and easier for your business.

Spain property

MAKING OVERSEAS PAYMENTS FOR BUYING PROPERTY IN SPAIN

When purchasing a property in Spain, we explain all the steps involved in the purchase. We can demonstrate how to make the most of your money when making the international payments to cover the purchase price and fees and how to avoid exchange rate risks.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter