Millennials fuel boom in luxury spending

Source: Xinhua | 2019-03-20

Luxury spending in China will maintain strong growth this year, although dipping to the mid-teens from last year’s 20 percent, the latest China Luxury Report from Bain & Company released yesterday shows.

This comes against the backdrop of an expected fall in economic growth to 6.2 percent from 6.6 percent last year.

The strongest growth in luxury sales is online — up 27 percent last year from 2017.

Sales of luxury goods hit 170 billion yuan (US$25 billion) last year, following the rebound in 2017 from the downturn that had lasted since 2011.

Chinese shoppers’ spending now contributes to one third of the 260-billion-euro (US$295.3 billion) global luxury market, picking up from around 19 percent seen in 2010.

Purchases of luxury items on China’s mainland will account for half of Chinese shoppers’ total luxury spending by 2025, compared to about 27 percent last year, Bain says.

The increase is being fueled by a near-doubling of mainland spending helped by lower import duties, stricter controls on the gray market and shrinking price gaps between the domestic and foreign markets.

Millennials are boosting the luxury market, buying up heavily on sportswear and accessories.

“They are embracing the latest fashion trends and they value the trendy street style, which has been a big boost to the overall luxury market,” said Bain & Company partner Bruno Lannes.