By Liu Jie and Wang Wen
BEIJING, Oct. 24 (Xinhuanet) -- International luxury brands competing to expand their presence in China have to face the fact that Chinese consumers prefer to buy premium goods abroad instead of domestically.
The World Luxury Association released a report in June revealing the Chinese spent nearly $50 billion in Europe, four times what they spent on luxury goods in 2010 on the Chinese mainland.
The figures have prompted hot debate on reducing China's import duty on luxury products. Although no general agreement has yet been reached, premium brand designers from overseas and distributors and retailers are keen on a tax cut.
Helmuth Hennig, managing director of Jebsen Group, a Hong Kong-based luxury marketing and distribution company, said it will be good news if a revised tax policy is released early next year.
If China issues a duty-reduction policy, "I think what we will do is to move some businesses which are currently conducted out of the country into the Chinese market", Hennig told China Daily.
Founded in 1895, Jebsen currently represents more than 200 premium brands in China, including Porsche, Bosch, Raymond Weil and Pentax.
"Taxes obviously affect expensive products, pushing consumers to consider where they make their purchases," Hennig said. "From that perspective, to me it makes sense that China should look at its overall tax situation."
Hennig pointed out a lot of Chinese consumers buy luxury items overseas because of the high import duty and taxes in China. "It may be good for the consumers but, at the same time, it may have a detrimental effect on China," he said.
Francois Henri Pinault, chief executive officer of PPR Group, is also aware of the situation. PPR is the world's third-largest luxury group by turnover. Based in Paris, it has 10 luxury brands including Gucci, Bottega Veneta and Yves Saint Laurent (YSL).
"About 50 percent of Chinese consumers who buy luxury goods buy them overseas, and Paris, Rome and Milan are their favorite destinations," said Pinault.
