Chinese people spend 73.6 billion USD on luxury goods

 Chinese people spend 73.6 billion USD on luxury goods

Last year, the Chinese spent 36% more of their budget on luxury goods, although it is not easy to travel abroad.

Last year, sales of personal luxury goods in mainland China grew 36 percent year-on-year, to 471 billion yuan ($73.59 billion), a Bain & Company report said. Compared to 2019 - the time before the pandemic, this number is twice as high.

Luxury sales grew despite a decline in China's overall retail sales since the pandemic began in 2020. Along with that, mainland China's share of the global luxury goods market Demand will increase 21% in 2021, from 20% in 2020.

"We expect this growth to be sustained, making China the world's largest luxury goods market by 2025 - regardless of future international travel," the Bain & Company report said. determined.

Sales of luxury leather goods increased by about 60%, followed by fashion and lifestyle with 40%. According to Bain experts, China remains the world's best consumer market, with a growing middle class. "The average increase in disposable income is still higher than inflation," they said.

A duty-free shop in Hainan, China on May 2, 2020. Photo: China News Service

A duty-free shop in Hainan, China on May 2, 2020. Photo: China News Service

A key driver for the Chinese luxury goods market is the growth of duty-free shops in Hainan, an island province in southern China. In the last two years, the government has reduced taxes and introduced measures to turn the area into a free trade port and international consumption hub.

Before travel restrictions due to the pandemic made it difficult for buyers to go abroad, luxury brands moved from Hong Kong to Hainan and other parts of China, due to the volatile situation in the special zone.

According to Bain, luxury sales at duty-free stores in Hainan hit 60 billion yuan, up 85% in 2021. Hainan accounted for 13% of mainland China's personal luxury goods market last year. , up from 9% in 2020 and 6% in previous years.

Analysts at The Economist Intelligence Unit expect the government's new policies to nearly quadruple China's domestic duty-free goods market to 258 billion yuan between 2021 and 2025. The force comes from the opening of new duty-free stores in major cities such as Beijing, Tianjin and Shanghai. But that also depends on Chinese authorities easing international travel restrictions and quotas on duty-free purchases.

"The duty-free market in Hainan still lags behind in product range and price competitiveness, especially for mid- to high-end products. Meanwhile, Chinese consumers prefer combine shopping with a holiday abroad, to experience foreign cultures and environments," the Economist Intelligence Unit reports.

According to Bain estimates, global spending on luxury goods will reach 283 billion euros ($320.6 billion) in 2021, recovering from a decline in 2020 and up slightly from 2019's 281 billion euros.

Growth in luxury sales slowed in the second half of last year, analysts said, due to a high 2020 comparison base, sporadic Covid-19 outbreaks, and new regulations on advertising Report to online influencers.