The Chinese will Account for 50% of Luxury Sales by 2025

The Chinese will Account for 50% of Luxury Sales by 2025

The Chinese will Account for 50% of Luxury Sales by 2025

Chinese consumers remain the focus of luxury goods makers, as a new study by Bain consultancy shows they will fuel nearly half of global high-end sales by Y 2025.

Bain said Thursday that Chinese shoppers will account for 46 – 50% of global luxury sales of an estimated $412-B in just 6 years. That is up from 33% of all sales of luxury apparel, accessories and cosmetics last year.

Bain partner Claudia D’Arpizio says 50% of those purchases will be Made in China, as price differences fade and brands improve the customer experience in the country.

Bain said luxury sales this year are forecast to grow 2% to EUR 260-B, from EUR 254-B last year, in figures restated to exclude luxury art, design and decor.

Luxury goods sales in China this year are forecast to be up 18% to EUR 23-B.

Europe and the Americas, are still the 2 largest markets, but remain flat due to strong currencies, totaling EUR 84-B and EUR 80-B, respectively.

Mr. D’Arpizio said that Bain identifies 5 different generations of luxury goods consumers in the current market, from those born before Y 1945 whose spending focuses more on experiences than hard luxury, to current teenagers who favor casual wear like expensive sneakers.

“This is an opportunity for brands to cherry-pick the customer. Loro Piana and Balenciaga have different customer bases, while Gucci or Louis Vuitton can be relevant for teen-agers or older customers,” she said.

“That is why we are very positive on the market going forward,” she said, with annual growth of 3% to 5%.

“All signs point to significant changes afoot for luxury brands over the next several years,” said Ms. D’Arpizio. “They can weather these disruptions by keeping in mind three key strategies: be proactive in developing approaches to serve new customers and address market trends; be distinctive in designing a winning formula; and be next-gen minded. The underpinning of all of these strategies is the emergence of new technologies, which will play a crucial role as a fundamental enabler for brands through 2025.”

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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