China to be world’s No 1 luxury market by 2025, Bain & Co forecasts (2024)

FAQs

China to be world’s No 1 luxury market by 2025, Bain & Co forecasts? ›

In 2019, a report from Bain & Company forecasted that China would account for around 45% of the global luxury goods market by 2025. However, the projection by the global strategy consultancy could not have accounted for the impact of the Covid-19 pandemic and other black swan events that downgraded growth.

In a report released in February 2020, consulting firm Bain & Co. said it expected Chinese consumers to account for almost half — that's 46% — of the global luxury market by 2025, up from around 35% in 2019.

Korea is the biggest spender in the world on luxury goods

According to Morgan Stanley estimates, Korea's spend on luxury goods grew 24% in 2022 ($16.8 billion), becoming the biggest spender on luxury goods.

Many countries have seen an increase in spending on luxury items, but one country now stands out as the world's biggest spender on luxury goods per capita: South Korea. According to analysts from Morgan Stanley, South Korea's spend on luxury goods saw a 24% increase in 2022 to €15.4 billion or about €300 per capita.

By 2025 Chinese consumers will become the leading purchasers of luxury by nationality and China the biggest market; click to enlarge. Source: Bain & Company. The study said: “The prompt 2021 rebound suggests that growth will be healthy for the personal luxury goods market in the medium term.

Dior and Chanel joined Louis Vuitton as the only luxury brands to grow in this year's luxury ranking. Dior with a total brand value of $11.4bn, growing 9% year-on-year. Chanel, with a total brand value of $56.0bn, increased its brand value by 6%.

Luxury already tends to outperform other retail channels during downturns because of its base of high-income consumers. A heightened focus on customer centricity in recent years was cited as “another source of resilience for the industry, as is the multi-touchpoint ecosystem that luxury has developed.”

As restrictions ease and cross-border travel picks up, the re-emergence of Chinese consumers—the largest cohort for spending in the global luxury goods sector—is expected to boost demand for high-end clothing, accessories and other items by 20% in 2023.

14, 2021. Whether it's calf-leather Italian Prada bags or classic, checkered British Burberry trench coats, South Koreans are the world's biggest spenders on personal luxury goods per capita, Morgan Stanley said.

1 – Louis Vuitton

Louis Vuitton has the most global monthly searches (8,330,000) and website visits (15,500,000). In 2022 Luis Vuitton alone did over £15 billion in sales. With a massive online following as well, Louis Vuitton cements itself as the most well-known and popular luxury brand globally.

Why do Chinese love luxury? ›

Chinese consumers are eager to purchase luxury as a means of social advancement and self-differentiation. They are also highly accustomed to shopping during their travels, with over 70% of Chinese consumers planning to travel overseas after the lifting of the Chinese Mainland's quarantine requirements.

As the world's second largest luxury market, China is expected to play a crucial role in shaping the future of the industry. According to Bain & Company, China's luxury consumption is forecasted to resume growth in 2023, and by 2030, the number of middle- and high-income consumers in the country will double.

Revenue in the Luxury Goods market amounts to US$53.61bn in 2023.

MIC 2025 is an initiative which strives to secure China's position a global pow- erhouse in high-tech industries. The aim is to reduce China's reliance on foreign technology imports and invest heavily in its own innovations in order to create Chinese companies that can com- pete both domestically and globally.

TOKYO – China is expected to overtake the United States by 2035 to become the world's largest economy, based on both countries' current growth trajectories, said prominent Chinese economist Zhu Min, a former deputy chief of the International Monetary Fund (IMF).

“Made in China 2025” is a strategic plan that was initiated in 2015 to reduce China's dependence on foreign technology and promote Chinese technological manufacturers in the global marketplace.

PARIS, WORLD CAPITAL OF LUXURY, DESIGN AND FASHION.

By far, the biggest audience for luxury brands is the audience between the age of 25-44 years.

Because a decline in disposable income affects prices, the prices of essentials, such as food and utilities, often stay the same. In contrast, things considered to be wants instead of needs, such as travel and entertainment, may be more likely to get cheaper.

What industry hurt the most during a recession? ›

Travel and Airlines. The travel industry is one of the first things people cut down on when they feel like their finances are tight, and airlines are usually one of the first companies to increase prices to make up for lost revenue. As a result, travel companies typically suffer during economic downturns.

Luxury tends to fare better than other retail channels during downturns because of its exposure to high-income consumers. A heightened focus on customer-centricity in recent years was cited as “another source of resilience for the industry, as is the multi-touchpoint ecosystem that luxury has developed.”

In 2023, Tencent remained the most valuable Chinese brand with a brand value of over 141 billion U.S. dollars in Milward Brown's BrandZ Global Top 100. Alibaba secured its second place with almost 92 billion U.S. dollars, followed by the alcohol manufacturer Moutai.

China is the world's largest e-commerce market—in fact, it is larger than the next nine e-commerce markets combined. More than 70 percent of China's consumers are true omnichannel shoppers, combining both online and offline approaches. The booming digital economy is creating a powerful explosion of consumer data.

Shanghai

“The very worthy #1, with more luxury brands than any other city in China can come close to matching, not only does Shanghai have innumerable shopping malls and luxury retail locations, but its Bund luxury district is among the finest in the world.”

This marks a 6.7% annual increase, which is half the growth rate of the previous year. In 2022, the US luxury goods market grew by 13.3%, to $109.3 billion.

If you ever find yourself in a position where you need to purchase a gift for a wealthy Chinese person, the Hurun report indicates these brands are their top choices: Chanel, Louis Vuitton, Dior, Gucci, Hermès, Cartier, Armani, Bvlgari, and Rolex.

According to Barclays estimates, China accounts for around 35 percent of Gucci's annual sales, compared to 27 percent of fashion and leather goods sales for LVMH and 26 percent for Hermès.

In 2023, Amazon overtook Apple's position as the most valuable brand in the world, according to the source's ranking. The e-commerce giant had an estimated brand value of about 299.3 billion U.S. dollars, while Apple was 297.5 billion dollars worth.

The Big 5 luxury brands – Louis Vuitton, Dior, Chanel, Gucci,and Hermes all have a significant presence on DeWu. Each of the brands have a large array of products listed and available to purchase, and in total generate significant revenue from Grey Market channels.

Which country has most luxury brands? ›

Many countries have seen an increase in spending on luxury items, but one country now stands out as the world's biggest spender on luxury goods per capita: South Korea. According to analysts from Morgan Stanley, South Korea's spend on luxury goods saw a 24% increase in 2022 to €15.4 billion or about €300 per capita.

Regarding the first area, most Chinese are very proud of China's long history as a strong and vibrant culture and as a highly influential political and social entity.

Today, luxury brands such as Burberry, Armani, and Prada manufacture in China not just because it is cheap but also because they are still able to get good workmanship for the price.

These consumers buy mainly Luxe to affirm their social status and success, which is called in China: the Face “mianzi” in Chinese. Willing to spend more than a month to pay it, a young Chinese will buy a Louis Vuitton bag not to be different but to integrate.

1. TSUKIJI FISH MARKET: The Tsukiji fish market is one of the biggest markets in the world that has been in existence for many years.

The Luxury Goods market in the U.S. is estimated at US$53.1 Billion in the year 2022.

Jun. 7 – Luxury tax in China has long been a source of significant revenues for the Chinese government, as anyone who has been able to compare the prices in China for luxury items to those in Hong Kong, for example, will be well aware. Yet the amount of money generated by China's taxing such items is staggering.

Yiwu Market, or Yiwu International Trade City, is the world's largest wholesale market—one that specialises in small and cheap goods.

At the end of last year the bank revisited its calculations. It now thinks China's economy will not overtake America's until 2035 and at its high point will be only 14% bigger (see chart).

According to Policy Brief No. 153 from the United Nations Department of Economic and Social Affairs (UN DESA), entitled “India overtakes China as the world's most populous country”, between 2023 and 2050, the number of persons aged 65 or over is expected to nearly double in China and to increase by more than double in ...

Will China ever surpass US? ›

There is still much work to be done to propel China to the top of the world's economy, but it is certainly possible that the Chinese economy can surpass the power of the US by 2050. It may also be too early to make definitive projections of China's future.

China is on pace to surpass the United States in 5^th generation fighter production, a dynamic shift with significant implications for the balance of air power in the Pacific.

At the beginning of 2023, the U.S.'s real GDP stood at around $20 trillion and China's at around $16 trillion—leaving a gap of $4 trillion. If the U.S. were leaving its closest peer in the dust, at the end of 2023, that gap will have widened.

MCF is the CCP's strategy to develop the People's Liberation Army (PLA) into a "world class military" by 2049. Under MCF, the CCP is systematically reorganizing the Chinese science and technology enterprise to ensure that new innovations simultaneously advance economic and military development.

According to a recent report by Harvard University, “From economic complexity growth estimates, India is growing at the annual list at the rate of 7.9 percent as the fastest growing country for the coming decade.

Some consensus has concluded that China has reached the qualifications of superpower status, citing China's growing political clout and leadership in the economic sectors has given the country renewed standings in the International Community.

The global luxury goods market size was valued at USD 272.74 billion in 2022 and is anticipated to grow from USD 284.00 billion in 2023 to USD 392.40 billion by 2030, exhibiting a CAGR of 4.7% during the forecast period.

The global market for Luxury Goods estimated at US$242.8 Billion in the year 2022, is projected to reach a revised size of US$369.8 Billion by 2030, growing at a CAGR of 5.4% over the analysis period 2022-2030.

The luxury market in the US is expected to rebound in the post-pandemic era, with analysts forecasting a growth rate of 8% by 2025.

What is the luxury fashion market forecast? ›

Revenue in the Luxury Fashion segment amounts to US$111.50bn in 2023. The market is expected to grow annually by 3.39% (CAGR 2023-2028). In global comparison, most revenue is generated in the United States (US$27,150.00m in 2023).

Luxury tends to fare better than other retail channels during downturns because of its exposure to high-income consumers. A heightened focus on customer-centricity in recent years was cited as “another source of resilience for the industry, as is the multi-touchpoint ecosystem that luxury has developed.”

Quiet luxury is one of 2023's biggest trends – and also one of the hardest to describe. It's one of those “you'll know it when you see it” trends. Quiet luxury is soft and tactile, it's beige and grey and, as Vogue put it, “it's less austere than minimalism but more polished than 'normcore'”.

Luxury resale will boom in 2023 as more brands take control of their second-hand markets. The 1% will continue to buy luxury goods, but other classes may pull back. The personal luxury market is expected to grow 3%-8% over the next year, according to Bain & Company.

The top five companies in the global luxury goods market by sales are LVMH (Louis Vuitton Moet Hennessy), Richemont (Cartier, Montblanc), Nike (Nike, Inc.), PPR (Prada Group), and Burberry Group plc (Burberry Ltd.), accounting for 49% of global sales in 2021.

Luxury goods companies can be considered inflation- proof as the consumer is willing to pay the increased price. However, in the long term this strong standing might be challenged. The high-end luxury market and major luxury brands are less affected by inflation than the rest of the market.

10% Return for S&P 500 a Real Possibility by End of 2023

Earnings drive stock prices. And in today's market, with its newfound emphasis on fundamentals, earnings really matter. Short of a recession — a very real possibility — consensus estimates are for about 5% earnings growth for S&P 500 companies in 2023.

Sustainability, purpose, and ESG visibility are now expectations. Today's consumers expect luxury brands to be purpose-driven and use their product offerings to advance their organizational values.

Many countries have seen an increase in spending on luxury items, but one country now stands out as the world's biggest spender on luxury goods per capita: South Korea. According to analysts from Morgan Stanley, South Korea's spend on luxury goods saw a 24% increase in 2022 to €15.4 billion or about €300 per capita.

Where the future of fashion is headed? ›

“Where the Future of Fashion is Headed” follows fashion pioneers as they attempt to make the industry future-proof by experimenting with new fabrics, waste and high-tech design.

Gen Z are starting to splurge on luxury shopping as young as 15 — up to 5 years earlier than their millennial counterparts did. 'Precocious' teens are set to become the biggest buyers of luxury goods by 2030 as the demographic of shoppers in the sector get younger and wealthier.