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

Martin Ham

Very useful information and fairly up to date! I would definitely recommend the site for anyone interested in exchanging currencies!

Alex Larsen

I've been struggling to find a way to make regular transfers to my Norwegian account from the UK (where I work). Finally I've at least got some pointers for where to start, so I won't have to pay a fortune every time I transfer!
purchasing overseas property

OVERSEAS PROPERTY PURCHASES – SAVE ON YOUR PAYMENTS

Explaining how you can make considerable savings by getting better exchange rates and low fees associated when purchasing a property overseas. We show you how to make considerable savings, avoiding poor exchange rates, high fees and the best time to make the transfer.

Purchasing overseas property - satisfying your currency needs for payment

EMIGRATING - TRANSFERRING YOUR ASSETS OVERSEAS

Moving overseas can be daunting, with many unexpected aspects to your move you might not have considered. We cover all the financial basics of moving abroad, from the expenses to consider to the most cost-efficient ways to transfer your bank accounts and financial assets to your new home.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter