The stage is set for China to become the world’s biggest luxury market by 2025, according to a new report.
In a year where global luxury spending has fallen dramatically, China’s domestic market is still poised to grow, as the region’s wealthy residents stayed close to home due to the coronavirus pandemic but splurged on jewellery, leather goods and fine wine.
Historically, luxury markets in Europe and the US have been fuelled by international travel — especially of Chinese tourists. But the new report from Bain & Co. predicts wealthy Chinese consumers are going to be doing much more of their spending locally in the years ahead.
“The overall [luxury] market has basically been shut down,” said Federica Levato, a Partner at Bain’s luxury goods vertical, citing lockdowns and pandemic-induced store closures. “And then the immediate consequence of it was no travel, basically. We’ve had 11 months of no intercontinental travel whatsoever.”
The result of this is that local luxury consumption has soared in China and it is helping its luxury market continue on its path of overtaking Europe and the Americas by 2025.
