China's share of the global luxury market nearly doubled in 2020

Wednesday 6 January 2021 13:57 CET | News

A report by Bain and Company and Tmall Luxury Division has revealed that China’s share of the global luxury market nearly doubled in 2020.

The report shows growth for the mainland China luxury market, which is expected to climb by 48%, Fashion United stated. Although the global luxury market shrank by 23% in 2020, mainland China’s market share increased from about 11% to 20% in 2020 and is likely to continue, putting the country on track to claim the biggest share of the global luxury market by 2025.

Moreover, growth in China’s luxury goods market has been led by Millennials (born between 1980 and 1995) and Gen Z consumers (born after 1995), with many young consumers now making their first luxury purchase at age 20. There has also been an increase in digitalisation, with China’s luxury online sales increasing from about 13% in 2019 to 23% in 2020, as the pandemic drove up online luxury sales by about 150%. 

Millennials also represent more than 70% of Tmall’s luxury fashion and lifestyle market, while Gen Z is the fastest-growing group. Besides, leather goods and jewellery led the way at a rate of about 70% to 80%, while ready-to-wear clothing and shoes grew about 40% to 50% and high-end watch purchases increased by about 20%. The final growth area identified in the report was Hainan Island’s duty-free sales, which saw a boom in 2020, driven by COVID-19 travel restrictions and attractive shopping policy changes.

However, global conditions are unlikely to return to normal before 2022 or even 2023, as Chinese consumers might remain cautious about international travel even after borders reopen. As a result, most luxury brands believe that domestic growth will continue in 2021 at about a 30% level. 

Additionally, the online shopping behaviour of Chinese luxury consumers  has been permanently changed, as 40% of those surveyed stated they plan to increase their share of online luxury shopping, while another 40% said they plan to maintain their current share.

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Keywords: Bain and Company, Tmall Luxury Division, report, research, China, global luxury market, Millennials, Gen Z, pandemic, COVID-19, online shopping behaviour
Categories: Payments & Commerce
Countries: China
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Payments & Commerce