China has always been thought to have higher prices for luxury goods than the rest of the world, but according to new research by Luca Solca – head of luxury goods at Exane BNP Paribas – average prices for high-end designer goods are an incredible 20% higher than the global average.
The Asian market has seen higher prices than Europe and the United States for some time, but the size price gap varies depending on the brand. For example Dolce & Gabbana has a price difference of around 50%, while Armani is an eye-watering 75%.
Other brands see a lower price gap, with Balenciaga up around 25%, and a pair of Tom Ford glasses seeing a price discrepancy of around 20%.
Of course currency values play a significant role in the price gap across countries, and the weakened pound after Brexit has seen tax-free spending increase in the UK, up about 50% on the same time last year. The price gap has seen increased spending in the UK by Asian consumers, eager to take advantage of the lower value of the pound and the cheaper prices for luxury goods in Europe.
Internationally, the prices of high-end luxury goods have not seen a dramatic increase over the last year, with most brands increasing by between 1-4%. The largest increase was seen by Ferragamo, who saw a 4% rise in global prices.
According to the report, brands are expected to remain cautious when it comes to increasing prices, banking instead on higher volumes purchased by an increase in middle-class consumers, couples with an increase in retail productivity.