Increasing appetite levels for luxury goods will continue to redefine Australia’s retail landscape, with a surge in Chinese-led spending driving international brands to expand their footprint across the country.
According to the latest report by global property advisor CBRE, Luxury Retail 2015, 70% of all Chinese-led luxury purchases are now transacted overseas, resulting in increased sales across the world, including Australian markets.
Andrew Phipps, Head of Research and Consulting, EMEA, CBRE, said: “Chinese purchasers account for 30% of the luxury spend worldwide and 70% of these purchases take place overseas, showing that the downward shift in their economy has prompted Asian consumers to rethink their purchasing habits.
“The advent of the new ‘anti-extravagance legislation’ in China and their consumers‘ growing awareness of price differentials of up to 70% has led to many preferring to make their purchases overseas, where the prices are far more attractive.”
The shift in Chinese shopping habits is providing opportunities for luxury brands to grow their presence across Australia, as it becomes a target destination for luxury expansion over the next five years.
CBRE Head of Retail Brokerage Leasing, Australia, Leif Olson said international brands were looking to capitalise on the uptick in demand for luxury goods by securing a presence in Australia’s biggest fashion hubs.
“In 2015, the Australian retail landscape has transformed significantly, with a plethora of global brands lining up to open stores across the country” Mr Olson said.
“This momentum shows no sign of slowing down, with affordable luxury brands to lead the charge in Australia over the next year, while top tier brands will look at securing flagship assets in core locations.“
Mr Olson said the next wave of growth in Australia’s luxury retail market would be centred on the expansion of retailers in Brisbane, Perth and Adelaide; the addition of food and beverage to luxury retail; and growth of premium childrenswear.
“The addition of food and beverage to luxury retail stores is an untapped market in Australia, and a widespread concept already seen in the world’s largest fashion meccas, including Hong Kong and Macau,” Mr Olson said.
“Not everyone is in a position to splash out on a luxury branded handbag or wallet, but being able to have a coffee or meal at Armani, for example, broadens the brand’s appeal and makes it more accessible for everyone.“
“Adding a food and beverage component is a key step towards making a brand more diverse, transitioning it from being fashion-oriented to more lifestyle driven,” Mr Olson added.