Although international flight capacity in mainland China has only recovered to 87% of 2019 levels, Chinese consumers' overseas luxury spending has already surpassed pre-pandemic levels, with a 32% year-over-year increase in May and a 22% rise in June.
In the first half of 2024, overseas spending by mainland Chinese consumers surged. But annual growth trends for domestic and international spending will heavily depend on exchange rates and business policies in the second half of the year.
Data shows that luxury spending by Chinese tourists has shifted noticeably from Europe to more price-competitive Asian markets, such as Japan, South Korea, and Singapore.
Take Japan as an example: since early 2024, the Japanese yen’s continued depreciation against the Chinese yuan has effectively created a “passive discount” on Japanese goods, especially luxury items, resulting in significant price differences.
A survey by Oliver Wyman shows that luxury goods in Japan are 10% to 30% cheaper than in mainland China, and are even less expensive than in Hong Kong.
The substantial price gap has greatly stimulated the Chinese consumers’ purchasing enthusiasm, with headlines like "Japanese LV stores packed with Chinese shoppers" frequently trending on social media. This trend has also helped Japan emerge as a standout market during the global luxury downturn.
