The coronavirus pandemic continues to rage but that hasn’t slowed down the Chinese luxury market at all.
Last year, the country’s personal luxury market grew by 36%, according to a new report from Bain & Company (h/t Barrons). Thanks to this spending boom, China’s share of the global luxury market is now larger than it was before the pandemic began.
The consultancy firm’s latest report estimates that Chinese consumers spent 471 million yuan (equivalent to $74.3 billion) on personal luxury items last year. Not only is this a marked increase over what was spent in 2020 (which itself was a 48% increase over 2019), but it also means that the country’s luxury spending has almost doubled since the start of the pandemic. These goods include items such as clothing, shoes and jewelry, but exclude travel and experiences.
The main reason for the increased spending can be attributed to travel restrictions enacted due to Covid-19, which has seen consumers spend their money domestically rather than overseas. Other factors that contributed to the growth included a 56% increase in online shopping, as well as the establishment of a duty-free zone in Hainan, an island province in southern China.
Due to increased spending, China’s share of the global luxury market now stands at 21%, and Bain & Company expects that figure to continue to rise. “We expect this growth to continue, putting the country on track to become the world’s largest market for luxury goods by 2025, regardless of future international travel patterns,” said Bruno Lannes, partner at the firm, in the report.
Of course, luxury goods markets are not just developing in China. They seem to be booming all over the world. Over the past two months, we’ve seen a strong rebound in the luxury real estate market, several watch auction records are falling and Rolls-Royce is posting its best ever sales figures.
It seems that many of us deal with the discomfort of the moment by opening our wallets.