Chinese consumers will remain the driving force for luxury goods market, according to a new study by Bain consultancy released yesterday that shows they will fuel nearly half of global high-end sales by 2025.
Chinese shoppers will account for 46 percent of global luxury sales of an estimated 365 billion euros (USD412 billion) in just six years, Bain said in the study, which was prepared for Italy’s Altagamma association of high-end producers. That’s up from one third of all sales of luxury apparel, accessories and cosmetics last year.
Bain partner Claudia D’Arpizio says half of those purchases will be made in China, as price differences between countries fade and brands improve the customer experience in China.
Bain said luxury sales this year are forecast to grow 2 percent to 260 billion euros, in figures restated to exclude luxury art, design and decor. Taking into account both luxury goods and experiences, the market is expected to grow by 5 percent to 1.2 trillion euros globally.
Luxury goods sales in China this year are forecast to be up 18 percent to 23 billion euros. Europe and the Americas, still the two largest markets, remain flat due to strong currencies, totaling 84 billion euros and 80 billion euros, respectively.
D’Arpizio said that Bain identifies five different generations of luxury goods consumers in the current market, from those born before 1945 whose spending focuses more on experiences than hard luxury, to current teenagers who favor casual wear like expensive sneakers.
“This is an opportunity for brands to cherry-pick the customer. Loro Piana and Balenciaga have different customer bases, while Gucci or Louis Vuitton can be relevant for teen-agers or older customers,” she said.
“That is why we are very positive on the market going forward,” she said, with annual growth of 3 percent to 5 percent.