China's luxury market expanding fast, buoying up world markets
China's luxury market is the fastest growing in the world, setting to rise an astounding 15 percent annually thanks to renewed confidence, middle class acceleration, and consumer sophistication.
This comes amidst accelerating growth in the global luxury market, which is expected to add 5 percent to an estimated 1.2 trillion euros (US$1.4 trillion) in 2017, a recent study shows.
Chinese consumers, who are increasingly fashion-savvy, are boosting sales in local markets, which are expected to reach a market size of 20 billion euros this year, with Chinese nationals' contribution to global luxury purchases is also estimated to represent 32 percent of the overall market in 2017.
The core market for personal luxury goods reached a new record high of 262 billion euros, boosted by a return of Chinese buying both at home and abroad as well as stronger purchasing trends in other regions, according to the "Bain & Company Luxury Study" released in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers' industry foundation.
“We started to see stronger momentum in the first half of the year, and this has continued in recent months, allowing the market for personal luxury goods to really regain its lustre,” said Claudia D’Arpizio, a Bain partner and lead author of the study.
“The growth in this market is more robust, driven by increases in volumes rather than prices and a rediscovered balance between tourist purchases and re-ignited local consumption," she added,
The positive growth in the global market is expected to continue at an estimated 4 to 5 percent annual growth rate in the next three years, with the personal luxury goods market estimated to reach 295 to 305 billion by 2020.
Bain estimates that online sales for personal luxury goods will make up 25 percent of the market by 2025, with stores still accounting for 75 percent of purchases.
