Chinese Crackdown on Corruption Shakes up Luxury Gifting

Rolex watches and a pricey liquor popular for toasting with at banquets are no longer top brands for gifting among China's wealthiest consumers, according to a new survey, reflecting in part the impact of a government crackdown on corruption. The "Chinese Luxury Consumer Survey 2013" underscores the nuances of luxury marketing in China and the importance of gifting in Chinese culture. The Shanghai-based Hurun Report, which tracks consumption habits of China's richest individuals and conducted the study, has said the demographic spends about $24,000 on gifts each year, mostly to be given away at business occasions. "You have a change in the political leadership and (that) meant a big anti-corruption drive," said Hurun founder Rupert Hoogewerf, referring to the new class of Communist Party leaders who will be installed in March. "They're very much trying to demonstrate you're not allowed as an official or someone in authority to receive gifts that are clearly expensive." Corruption among government officials is rampant, and examples abound of cadres at all levels leading lavish lifestyles far beyond the reach of their modest official salaries. "Last year, Rolex was in the top 10 (of popular brands for gifting.) Now it's been replaced by Longines, which has a starting price of maybe 8,000 renminbi ($1285). Rolex is 50,000 renminbi ($8,000)," Mr. Hoogewerf said. "The gifts people give are more modestly priced, they're reluctant to give such expensive gifts." Kweichow Moutai, a potent firewater that's downed from teacups at banquets, was the only Chinese brand on the list. Retailing at about $300 a bottle, it tumbled to No. 13, down from No. 5. Mr. Hoogewerf stressed that the corruption crackdown wasn't the only factor affecting luxury gifting. Like other countries around the world, China's economy is slowing, and that has triggered anxiety among wealthy consumers. Apple was the only American brand on this year's list of "Best Brand for Gifting by Men," climbing to the No. 2 spot from No. 4 last year. French brands made up the rest of the Top 5: Louis Vuitton, Hermes, Chanel and Cartier. Brands considered best for gifting by women were: Chanel, Louis Vuitton, Cartier, Tiffany & Co and Apple. The survey questioned 551 mainland Chinese with personal wealth of more than $1.6 million.

Chinese Crackdown on Corruption Shakes up Luxury Gifting

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