Luxury expenditure makes China the fifth largest market for the segment; however, taking into account the purchases made abroad, Chinese consumers are the world’s biggest group of luxury consumers. This is why when the Government announced a 2% devaluation of the yuan on August 11, the local currency, the biggest luxury brands’ shares slid.

Companies such as Ferragamo, Tod’s or Prada make a major percentage of their sales in China, which will now become more expensive from the point of the view of Chinese consumers. “Accessible luxury” brands, such as Michael Kors and Coach, will be hit as well says an article on the Quartz website.

According to Luca Solca, a luxury goods analyst at Exane BNP Paribas, travel shopping accounted for 40% of the global luxury-goods purchases, but now, with a weaker yuan against other currencies, a significant proportion of these purchases could be re-thought.

However, many economic analysts have already declared that a 2% devaluation may not be able to change the Chinese consumer spending behaviour but instead could boost shopping at home.