China on track to become world’s largest luxury market by 2025

This is even as its luxury goods demand is seen to have moderate growth.

Mainland China is on track to become the largest luxury market in the world by 2025 after it sustained its double-digit growth in 2021.

Its share of luxury market rose to 21% in 2021, up from 20% in 2020. Bain & Company forecasted this growth to continue, keeping it at pace to be dominate the luxury goods market, regardless of uncertainties over travel patterns.

Despite this, the consulting firm noted that the incline was not steady as most categories registered between 40-100% year-on-year increases in the first half of 2021 against 0-25% YoY growth in the second half.

This was due to several factors, such as the sporadic outbreaks of COVID-19 infections and the more conservative consumer sentiments, amongst others.

In a report, Bain & Company the recorded another year of double-digit growth with some brands seeing an increase of more than 70%.

In 2021, the domestic sale of personal luxury goods in China climbed 36% in 2021, amounting RMB471b.

Chinese consumers shopped largely in the mainland as border restrictions persisted in light of the pandemic.

“This growth varied significantly across brands (ranging from 10% to more than 70%) and categories,” the report read.

Leather goods recorded a 60% growth rate, the fastest amongst the categories. It is followed by fashion and lifestyle, at about 40%.

Jewelry trailed behind at 35%, which is lower compared to 2020; whilst high-end watch purchases went up by about 30%. Moreover, luxury beauty spending rose by about 20%.