Report Estimates China Accounts For 27% Of Global Luxury Spending
As always, we’re apt to take these findings with a grain of salt, but a new report by Bain & Company estimates that China has surpassed the US to become the world’s largest luxury market. Led by a 7 percent rise in luxury spending this year — strong compared to the global average but down from the double-digit growth we’ve seen in Greater China for the past several years — Bain holds that China accounts for 27 percent of spending on luxury goods and services globally, compared to 20 percent for the United States. Previous reports have projected that China will account for 33 percent of luxury spending by 2015.
All told, Bain expects luxury spending in China to hit US$18.1 billion, yet when taking into consideration the massive spending done by Chinese shoppers outside of the country, the country’s overall luxury spending balloons to $46.4 billion, Warc reports today.
Despite a comparatively low growth rate this year inside mainland China, a weaker euro and easier visa procurement has seen Chinese consumers continue to place a premium on overseas shopping. This has become even more apparent this year, as internal developments like a crackdown on high-end spending with public funds and a continuing backlash against conspicuous consumption have put a damper on domestic luxury shopping. A major indication of the shifting nature of China’s luxury market is the declining proportion of sales destined for gift-giving — a segment of the market that has typically favored luxury watches, fine wine and leathergoods in particular. Down from 30 percent of sales in 2011, Bain estimates that gift-giving in 2012 accounted for 25 percent of sales.