China's corruption crackdown takes shine off luxury boom

Luxury brands can increase to a rebound in China betting on sales for an unpleasant surprise: the weak demand in the second largest market for luxury, the economic slowdown, which outlast Beijing conspicuous consumption suppressed. China is sensitive to anything that raises suspicion of corruption, especially after the scandal surrounding Bo Xilai and Emerald Womenswear Gu Kailai tainted leadership change this year for a decade. The government has a "frugal style of work" rule of officials, entered into force on 1 October in force, they were forbidden public money or lavish banquets, luxury cars, expensive gifts and accept imposed. Gifts are often in exchange for China, where corruption is widespread offered. The culture of giving is a source of demand for luxury brands in the world before. A number of high-profile incidents, including a high-speed crash with Ferrari was the son of a high official and a local government official photographs show luxury watches on the scope of his salary, have angered many Chinese, who has in the blogosphere to express their anger. The representatives of the local government was dismissed for "gross violation of discipline", state media said this weekend. The Chinese police inspectors examine how to help recognize the luxury brands expose corruption. "Luxury goods are very expensive servants and civilians whose salaries over 5,000 yuan (790.6 million) per month, it can not afford," China Daily reported Friday. "And the servants who have luxury products should be a convincing explanation of how she got it." Luxury brands have a slowing economy and a little tired of fighting the flashy fashion that prevent Chinese buyers flamboyance in favor of sobriety display of wealth. Beijing repression suggests that even if the economy begins to grow again later this year, as many economists predict, the demand for luxury can be moved. "There is certainly a general of bling and gold taps. This is a permanent change," said Rupert Hoogewerf, Hurun Report Chairman, a luxury edition in Shanghai, the China Rich List is based on. Hoogewerf said, while many Chinese consumers are retreating on spending due to a weakening economy, it is also a heightened sensitivity surrounding luxury purchases. TOUR DE PRADA? Warning British fashion house Burberry Group Plc 11th September, that revenue growth is much slower than expected luxury frightened investors in China and is concerned that the industry as a whole was in danger of tripping. His Italian rival, listed in Hong Kong Prada SpA are preliminary results later on Monday and investors are looking for the company to deliver a clearer picture about the state of Chinese demand. Analysts have remained mostly optimistic about the prospects for Prada, eyeing strong growth in market share and brand perception good, but the shares are up 7.5 percent since Burberry warning. There are signs that Beijing is "frugal" campaign, announced in July, has already hurt the demand for luxury. In Hong Kong, a popular luxury destination shopping for mainland China, July sales rose by only 3.8 percent a year earlier, slowing from 11 percent in June compared to year growth. Figures for August is for 4th October planned. Gift giving is a cultural norm in China, seen as a way of respect. It is not uncommon for employees expensive bottles of alcohol, jewelry and sumptuous meals entrepreneurs in the community to receive. As the crackdown in Beijing announced that demand disappeared typical gift items like watches and wine. Jebsen, a distributor of premium brands in China and one of the largest concessions Porsche in the world, said that his Porsche sales remained healthy, 28 percent in August compared to last year. But the sale in Hong Kong Bordeaux wines have fallen 25 percent in value and 6 percent of the volume. Hong Kong is a popular entry point for China upscale Grands Crus. To be sure, China still has a lot of people. Willing and able to spend your money on new features, and Hong Kong and Macao gambling enclave are a shopper's paradise The casino billionaire Steve Wynn Macau, which houses top brands like Louis Vuitton, Dior and Piaget is the retail business remains strong with sales and over the same period a year ago, said a spokesman for Wynn. Villages outlets are always popular for Chinese consumers, who enjoy substantial tax savings. Desirée Bollier, CEO of Value Retail, which has nine villages production in Europe, said the Chinese clients are opting for smaller niche players European brands offering unique products they do not find at home. "The demand is not from, but to develop - the range is larger and more complex," she said.