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Beijing's Odd Luxury Sales Boom
Summary:In most Chinese cities, retail sales peak between Christmas and Chinese New Year. In Beijing, however, the spike tends to occur in March.

By Wang Fang (王芳) Shen Jianyuan (沈建缘)
News, page 1
Issue No. 560, Mar 12, 2012
Translated by Ma Zheng
Original article:

This is an extended abstract of an article that appeared in this week's edition of The Economic Observer, for more highlights from the EO print edition, click here.

The peak season for most high-end stores in China runs from Christmas to the Spring Festival, but Beijing is special – luxury retailers there enjoy an extra boom month in March.

Several days ago, a friend of Ou Yangkun (欧阳坤), the head of the World Luxury Association in China, asked him to help order several Hermes belt buckles with embedded diamonds, each of which cost 280,000 yuan. The stores that Ou called all told him that the products were sold out and that he would have to wait for some time for the product to be restocked.

Other customers complained on their microblogs that all the stores in Wangfujing, Guomao and Shin Kong Place had run out of Prada bags.

For most Chinese cities, the peak season for sales runs between Christmas and Chinese New Year. Not so in Beijing. There, sales for top luxury brands tend to soar in March. One former distributor for a top Italian brand estimates that monthly revenue literally doubles in March.

"I was so confused when I first came to China. I always saw people come to the shop in pairs. One of them shopped, and the other one was only responsible for paying the bills," a salesperson from abroad said.

One of the characteristics of these March buyers is that they frequently pose the question: “What do you recommend?” The sales clerks are well briefed as to how to cater to these special purchasers.

“In general, these customers don’t like to be proposed merchandise that’s too eye-catching, but most adore the very expensive watches,” said one particularly experienced saleswoman. Gucci handbags, Hermes scarves and Montblanc pens are also popular items. One suspects men are buying them as gifts for the ladies.

“Our survey focused on this special peak season that only exists in Beijing,” the Italian distributor said. “It demonstrates that many of these purchases are meant as gifts.”

According to “The 2011 Study of the Chinese Luxury Goods Market” conducted and published last December by Bain & Company, a strategic consulting firm, Chinese consumers spent roughly $33 billion on luxury goods in 2011. Roughly 30% of those purchases were gifts.

"Though sales spike in March during the national congresses, executives of luxury goods companies say that lavishing government officials with such products is a year-round practice that reflects China’s culture of gift-giving and tradition of basing business decisions on personal relationships," David Barboza, a reporter with the New York Times, wrote in an article about the subject published three years ago.

A more recent report from China Economic Weekly (中国经济周刊) quoted a leader from Beijing Supervision Commission saying that "unless we had been told by a corrupt official, we wouldn't even know that a pair of glasses could cost several million yuan."

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