Shanghai named Asia’s most expensive city for rich shoppers
China accounts for about 20 percent of global luxury sales in 2015, according to new McKinsey research. Source: Shutterstock
SHANGHAI has been named Asia’s most expensive city for a myriad of luxury goods and services, overtaking Hong Kong as the prime location where High Net Worth Individuals (HNWI) splurge on their lifestyle spending, according to a report.
The Bank Julius Baer Co.’s annual Wealth Report: Asia, which tracks where the rich spend their money, also found that jewellery and gems are among the most favoured passion investments among HNWIs in Asia.
The report cited luxury auction house Sotheby’s findings that Asian clients account for about a third of global high-end jewellery sales.
In one comparison, Julius Baer benchmarked the prices of the Cartier Love Bracelet which were found to be the most expensive in Shanghai (USD 48,143), while on the other hand in Kuala Lumpur, Malaysia, the jewellery retails for Kuala Lumpur US$41,818, replacing Hong Kong as the most price competitive market.
Shanghai’s largest price tag for the item was due to high import tariffs on luxury jewellery, approximately 40 percent, while the findings of the two other cities arose from the twin effects of higher prices in Hong Kong and marked declines in Kuala Lumpur.
The Switzerland-based bank defines High Net Worth Individuals (HNWI) as people who have a net investible wealth of US$1 million or more. The assets they possessed exclude the property that is their main residence.
The survey, which is in its eighth year, involved the collection of data from June 2017 to July this year.
Also contained in the report is the Julius Baer Lifestyle Index 2018, which compares 22 goods and services across 11 Asian cities, including Hong Kong, Singapore, Shanghai, Mumbai, Taipei, Jakarta, Manila, Seoul, Kuala Lumpur, Bangkok, and Tokyo.
In the report’s the His & Hers Index, the bank compares the cost of grooming for wealthy women and men across Asia.
“Our Julius Baer Lifestyle Index maintains its upward trajectory since its launch eight years ago, underscoring the strength in demand for luxury goods and services in Asia,” the bank said in a statement.
A poster with a portrait of Chinese President Xi Jinping overlooks a street in Shanghai, China, September 21, 2017. The slogan reads: “Follow the Party’s command. Be capable of winning wars. Maintain good discipline.” Picture taken September 21, 2017. Source: Reuters/Aly Song
“Government efforts to boost domestic consumption, price harmonisation by luxury companies, and the scarcity factor were among the contributing factors to robust price trends.”
What justifies the price tag of a luxury jewellery piece?
According to Julius Baer, this depended on the item’s prestigious brand, the intricacy of the craftsmanship, as well as the quality of the precious stones, that enhance its desirability.
“Market trends are significant too. For instance, natural pearls went through a spectacular growth a few years ago, though prices have since cooled off,” it said.
“Looking at Asian demand, the rise of mainland Chinese buyers over the past decade bears close watching. Despite China’s anti-corruption drive, the impact on domestic spending on high-end jewellery has been limited.”
Luxury jewellery sales in China increased by 6.6 percent year-on-year to RNB14.9 billion (US$ 2.17 billion) in 2017, the bank said, citing data from market researchers Euromonitor.
“Many mainland Chinese continue to buy rare pieces that include top-of-the line diamonds, coloured gemstones and jadeite to diversify their investment portfolios amid a volatile global economy.”
“Vintage signed jewellery has also garnered investor interest, given their appreciation in value in recent times.”
