A view of a person wearing mask passing by a Macy’s in Herald Square amid the coronavirus (COVID-19) outbreak on March 24, 2020 in New York City.
John Nacion | NurPhoto | Getty Images
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 expensive jewelry, leather goods and fine wine.
Historically, luxury markets in Europe and the United States have been fueled by international travel — especially of Chinese tourists. But, a new report from Bain & Company 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: Local luxury consumption has “roared” in China, Levato said.
Chinese consumers were already a known force in the industry, accounting for a third of luxury spending last year, Bain said.
This year, Mainland China is expected to be the only region to report year-over-year growth, with the country’s luxury market soaring 45% to reach 44 billion euros (US$52.21 billion), Bain’s 2020 Fall Luxury report said.