THE growth of luxury spending in China has dramatically slowed amid China’s continuing anti-corruption efforts.

    Growth of luxury industry sales will steadily slow to 12 percent annually in the future three years, while the annual growth was 27 percent between 2008 and 2012, according to consultant firm McKinsey & Co.

    “In the first quarter, our sales went up by 4.6 percent compared to last year,” Chu Xiaohui, general manager of C&D Wines Group Beijing, recently told CCTV. “But in previous years we used to see 30 percent increases in this period, so our sales are slowing down.”

    Hang Sang Bank of Hong Kong estimated that visitors from the mainland account for about one-third of overall retail spending in Hong Kong. However, Hong Kong retail sales growth unexpectedly slowed despite the growth of visitor numbers, who were losing interest in luxury items.

    Sales of alcohol and tobacco fell by 20 percent in July from a year earlier, the bank said.

    The situation is forcing luxury companies to change their marketing strategies in China. To shore up sales and convince buyers that their products are worth the hefty price tag, luxury companies are offering in-depth lessons and other perks.

    Jay Ginsberg, owner of wine dealer Ginsberg+Chan in Hong Kong, said the gift trade accounted for almost 40 percent of his business in 2011, but the situation has changed remarkably.

    “We’re not selling much to those who were passing these (bottles) on as gifts to officials. That’s disappeared,” he said, adding that anti-corruption efforts are the main factor in the drop.

    At a meeting of the Communist Party of China (CPC) Central Commission for Discipline Inspection last week, the CPC’s top disciplinary arm called for efforts to fight the “four forms of decadence,” namely formalism, bureaucratism, hedonism and extravagance.

    Practices like giving gifts or holding banquets using public funds around festivals, such as the Mid-Autumn Festival, which falls on Sept. 19 this year, must be restrained, according to a statement after the meeting.

    “These measures are sort of an extension of the ‘eight-point rule’ announced earlier,” said Shandong University law professor Xiao Jinming.

    The CPC leadership earlier introduced an “Eight Regulations” rule to fight bureaucratism and formalism, urging CPC officials to reduce pomp, ceremony, and bureaucratic visits and meetings.

    As a result, luxurious moon cakes are fading out of the market and the sky-high prices of moon cakes in the past few years are falling back to earth as the Mid-Autumn Festival approaches.

    Mid-Autumn is the second most important festival in China, after Spring Festival, and is an occasion for family gatherings and gift-giving. Mid-Autumn gifts often play a role in building business connections and networks.

    “Sales have been affected by the ban. I estimate by about 10 percent,” said Chen Yaoliang, manager of Xiyayucai Restaurant in Beijing. “There’s likely to be a sales drop of about 20 percent for boxes of moon cakes over 300 yuan.”

    Qi Na, a sales assistant at a supermarket in Liaoning Province, said expensive moon cake sales are a thing of the past.

    “The most expensive gift box is 1,188 yuan. We’ve sold only one,” Qi said.

    Wang Zhisheng, manager of a Walmart supermarket in Beijing, agreed.

    “Most buyers are in favor of moon cakes under 100 yuan, for themselves or family members,” Wang said. “It’s not just in supermarkets. High-end hotels are also facing a sales decline. Group purchases have plunged.”

    Song Linna, manager of Qianshan Hotel in Liaoning Province, said bookings have been affected.

    “There are strict regulations on public service departments’ purchases of moon cakes. Some of them even canceled their bookings. There’s a significant drop in big bookings,” Song said.

    Many members of the public have welcomed the change, though, saying they’d like to see moon cake prices once more reflect the sentiment of holiday reunions and humble gatherings.

    (SD-Agencies)