Luxury goods see boom in China

For Chinese people with pockets full of year-end bonuses, Spring Festival is the perfect time to put that money to good use. Luxury goods made by European brands have been the desired choice for many Chinese who have a generous disposable income.

Despite fetching a hefty price tag, Chinese consumers aren't shy when it comes to snagging up Europe's latest luxury goods. A report by Italy's AltaGamma says that the Chinese mainland buys about 7% of the world's luxury goods, while Chinese shoppers buy another 18% when vacationing abroad.

Armando Branchini, executive director of Altagamma Foundation, Italy, said, "Charges in the Chinese Mainland are very high, at least 17%, which brings a price difference between 25 to 35 percent for a series of products. It's even more if compared to European prices. It can be 35 to 45 percent in Europe as there are no shipping fees. So it counts a lot."

Chinese shoppers were the largest group buying luxury goods in 2012, comprising 25% of the world market. Satisfying the increasingly sophisticated Chinese consumer is becoming a challenge for luxury brands. Reports show that Chinese consumers are shifting away from over-exposed brands, to absolute quality products. For regional preferences, Paris has won over Milan to become the Chinese shopper's favorite destination, due to France's simpler visa rules.

Branchini said, "There's no doubt that the luxury goods also boosts the phenomenon of collectionism. I believe these products, even after years, will certainly be appreciated by an economic point of view. But above all it allows its consumers to live a memorable experience when using it."

With economic uncertainty spreading in the eurozone, Italy has seen a sharp decline in the sales of luxury goods. At the beginning of the year, most luxury brands have seen prices rise up to 30%, to compensate for the euro's depreciation, an increase in taxes and raw material costs. But this hasn't stopped Chinese consumers in snatching up the latest luxury goods.