Luxury goods are priced 30-50 percent higher in China compared to the prices in European countries, according to an analysis.
For example, the retail price of a handbag from a leading luxury house is 6,100 yuan (about US$ 964) in China, but the same bag is sold in Europe for €500 (about US$ 619), i.e. the difference of about 36 percent.
The huge difference in prices in Chinese domestic market and abroad is the main reason for the Chinese consumers’ preferring to buy luxury goods in overseas markets.
Moreover, discounts are rarely offered on luxury goods in China, whereas the phenomenon is more common in European markets.
For example, global luxury brands like Louis Vuitton and Gucci offer discounts ranging from 5-7 percent during every major festival in France. Promotional offers can also be seen after the season is over in overseas markets.
A research conducted on Chinese luxury goods market by Bain & Company concluded that Chinese consumers bought about US$ 50 billion worth of luxury goods from overseas markets in 2010, which was nearly five times the consumption of luxury goods in China.