China’s National Bureau of Statistics' recent report is spreading optimism among luxury brands hoping to maintain their sales growth in the Chinese market. According to the data released, Chinese consumer sentiments are very positive: The country's average national spending saw an impressive 15.8-percent year-on-year growth.
Shanghai's average spending topped the ranking, with individual spending for the first three quarters of 2021 reaching 5,563 (35,499 RMB), followed by Beijing 4,981 (31,781 RMB), which was almost double the national average of 2,707 (17,275 RMB). Other regions that exceeded the national average were Zhejiang, Tianjin, Guangdong, Jiangsu, Fujian, and Chongqing.
The Jing Take
According to Topsperity Securities, this consumption trend is expected to further accelerate in the fourth quarter, thanks to the upcoming traditional peak season for consumption and the “Double 11” carnival. And, with China both containing the pandemic and improving income levels and employment statuses, consumer sentiment is forecasted to maintain a positive trend over the long term.
Therefore, the cities and regions mentioned are sure to become luxury hotspots if they aren’t already. Brands that have not established their footprint in those locations should have to consider doing so. Otherwise, they may lose the chance to connect with local luxury spenders.
The report also points out spending on education, culture, and entertainment grew the fastest, with a growth rate of 46.3 percent. That means shoppers are placing increasing importance on experiences. Due to this change, popups, exhibitions, and events will likely grow in popularity as gateways for Maisons to win over domestic consumers.
The positive figures show China’s crackdowns on celebrities and tech and its call for “common prosperity” have not slowed Chinese consumption. Instead, the country's rising living standards look like an unstoppable trend. As such, high-end brands can continue to bet on China to deliver brilliant financial results.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.