China’s luxury market up 12% YoY in 2023

However, it has not yet fully recovered to 2021 levels.

The luxury market of China saw a 12% year-on-year (YoY) in 2023 following a strong rebound in the first half of the year, particularly from the low base in the second quarter of 2022.

In a report, Bain & Company said the sector, however, saw weaker growth in the second half of the year as consumer sentiment amongst middle and high-income individuals declined.

Whilst the double-digit growth is “commendable,” Bruno Lannes, a Shanghai-based senior partner at Bain & Company said the market has not yet fully recovered to its 2021 levels.

“The recovery was tempered by the challenging economic climate and increased overseas shopping. As the market transitions to a post-Covid growth phase, uncertainties remain regarding the speed at which consumer confidence will resume and how overseas luxury shopping will evolve,” he added.

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Per sector, fashion and lifestyle and jewellery led the increase with a strong recovery rate between 15% to 20%. 

This is followed by the leather goods at 10% to 15% on the back of the lower-price bag segment.

Other categories such as beauty (8%), and watches(5% to 10%) both recorded growth.

Bain & Company added that duty-free sales in Hainan grew by around 25% due to the recovery in domestic travel and the government-led stimulus measures but has not yet returned to the 2021 high level.