Image Courtesy: www.retailinasia.com
In a bid to cultivate a domestic luxury consumption market and crack down on ‘smugglers’, who carry suitcases full of luxury goods into China, the country’s government has raised its fees on packages ordered from abroad.
From Friday, higher taxes will come into force on a range of goods either imported via the Internet or carried in by daigou. For instance, tariffs on luxurious accessories like watches ordered from abroad will double to 60 percent, while those on jewellery will rise 5 points to 15 percent.
According to Yating Xu, an economist for HIS Global Insight, “China wants to attract the outbound purchases back and cultivate a domestic luxury consumption market, which is consistent with the target to develop a consumption driven economy.”
Again, according to consultancy firm Bain & Co, luxury consumption on China’s mainland fell 2 per cent last year, even as purchases by Chinese buyers rose 251 per cent in Japan, 31 per cent in Europe and 33 per cent in South Korea.
For example, luxury items like the latest Dolce & Gabbana bag can be about 50 per cent cheaper in Milan or in Paris than on China’s mainland, although some brands like Chanel lowered Chinese prices last year to close the gap.
In this regard, Exane BNP Paribas analyst Luca Solca said, “We expect an adverse impact on overseas purchases by Chinese daigou (local for smugglers) and tourists alike.”
