The coronavirus pandemic continues to rage on but that hasn’t slowed the Chinese luxury market at all.
Last year saw the country’s personal luxury market grow by a whopping 36 percent, according to a new report from Bain & Company (h/t Barrons). Thanks to this boom in spending, China’s share of the world’s luxury market is now bigger than it was before the pandemic started.
The consultancy firm’s latest report estimates that Chinese consumers spent 471 million yuan (the equivalent of $74.3 billion) on personal luxury items last year. Not only is that a marked increase over what was spent in 2020 (which itself was a 48 percent increase over 2019), it also means that the country’s luxury spending has nearly doubled since the beginning of the pandemic. These goods include items like clothes, shoes and jewelry, but exclude travel and experiences.
The biggest reason for the increase in spending can be attributed to travel restrictions enacted because of Covid-19, which has seen consumers spend their money domestically as opposed to abroad. Other factors that have contributed to the growth include a 56 percent increase in online shopping, as well as the establishment of an off-shore, duty-free zone in Hainan, an island province in the south of China.
Because of the increase in spending, China’s share of the global luxury market now stands at 21 percent, and Bain & Company expects this number to keep climbing. “We anticipate this growth to continue, putting the country on track to become the world’s largest luxury goods market by 2025—regardless of future international travel patterns,” Bruno Lannes, a partner at the firm, said in the report.
Of course, luxury goods markets aren’t just growing in China. They appear to be booming all over the world. Over the last couple of months, we’ve witnessed a strong rebound in the luxury real estate market, multiple watch auction records fall and Rolls-Royce post its best sales numbers ever.
It sounds like a lot of us are dealing with the unease of the current moment by opening our wallets.