After the tariff reduction, luxury consumption will break out

The rumors that "the reduction of import tariffs on luxury goods" have finally been confirmed.

The Ministry of Commerce spokesman said recently that China will further reduce import tariffs, including some of the tariffs on high-end goods. According to reports, this luxury goods import tax adjustment will not take the one-step tariff reduction to zero as previously reported by the outside world, and the basic reduction rate will be set at about 2%-15%. Cosmetics, high-grade tobacco and alcohol varieties will go ahead, but The plan and implementation time should be based on the final policies issued by the Ministry of Commerce and the State Administration of Taxation. "I believe there will be results soon."

Stimulated by this good news, domestic luxury goods consumption will usher in an outbreak. Bain & Company predicted in a research report that Chinese consumers' demand for luxury goods will show a substantial growth trend, and it is expected to increase by 25% this year with sales of 11.5 billion euros.

High tax rates lead to large price difference <br> <br> much higher than the domestic prices of luxury goods abroad, it is a well-known fact. According to a survey conducted by the Ministry of Commerce, the 20 brands of high-end consumer goods, including watches, bags, clothing, wine, and electronic products, have a difference at home and abroad: the mainland market is about 45% higher than Hong Kong, 51% higher than the United States, and more than France. 72% higher.

In this regard, Tong Minqiang, general manager of Hangzhou Tower Co., Ltd., said that the main reason for the spread was the high domestic import tariffs. At present, China's luxury goods import tariffs are generally between 15% and 25%, and some are as high as 50% (such as cosmetics and alcohol).

In addition, luxury goods entering the store must also have customs inspections, store inspections, value-added tax, business tax, consumption tax and other taxes, which directly lead to domestic luxury goods prices at least 1/3 higher than the origin.

Shopping overseas four times the domestic <br> <br> in order to "evade customs duties", Chinese consumers have to look toward foreign countries, so shopping abroad, overseas purchasing extremely hot in recent years. According to incomplete statistics, Chinese people spend 200 billion RMB each year to purchase luxury goods abroad.

According to a report released recently by the World Luxury Association, from the beginning of February 2010 to the end of March 2011, the total consumption in the Chinese luxury goods market has reached 10.7 billion U.S. dollars, while the consumption of luxury goods purchased by the Chinese in the European market has accumulated nearly 50 billion U.S. dollars during the same period. It is 4 times as much as the domestic market.

According to the "2010 China's E-commerce Market Data Monitoring Report," it shows that in 2010, the scale of overseas market transactions alone reached 12 billion yuan, of which cosmetics and luxury goods were mostly, even at the 40% tax rate, the annual tax loss also Up to several billion yuan. "The seriousness of China's luxury goods' consumption is reflected by the fact that it is serious," said Yang Zude, a veteran of the business community in Hangzhou.

Impact on shopping malls or welcome shopping return tide "If the import tariffs are lowered, it will undoubtedly be a good thing for the Hangzhou business community and consumers." Yang Zude said that as a provincial capital city with large private economy, Hangzhou is becoming an emerging market for luxury goods. The data shows that Hangzhou has surpassed Guangzhou and has become a veritable luxury third city.

Yang Zude believes that the most direct effect of the downward adjustment of import taxes is to leave huge amounts of luxury goods that have been “big headed out” for a long time. Domestic beneficiaries are among the beneficiaries. Taking cosmetics that may reduce import taxes for the time being, this is a major luxury item sold by major shopping malls.

Shopping abroad has little short-term impact <br> <br> of course, a luxury import tax reduction, the ultimate beneficiaries are domestic consumers.