After a strong rebound in 2023, the Chinese luxury market is expected to grow at a mid-single-digit rate in 2024, according to the China Luxury Report by US consulting firm Bain & Company.
The market recorded a year-on-year increase of 12 percent in 2023, recovering from the pandemic-related decline the year before. While there was a strong rebound in the first half of 2023, growth weakened in the second half as consumer sentiment deteriorated among middle- and high-income earners. The recovery was driven by all categories, with fashion and lifestyle, jewelry, leather goods, beauty and watches showing varying growth rates.
Shopping abroad is on the rise
Two key trends that will shape China’s luxury market in 2023 and beyond are the return of luxury shopping abroad and the development of daigou – individuals purchasing products abroad that are not available locally or are significantly more expensive to sell through traditional channels and sell them via e-commerce and social commerce platforms.
As Chinese overseas tourism resumes, spending on luxury goods at home is expected to decline, while luxury purchases overseas will see a significant uptick. Price differences between luxury goods in China and other markets have helped make shopping abroad more attractive. In addition, the daigou market continues to evolve, with more and more professional models that adopt a platform-based approach emerging, particularly in the fashion and leather goods sectors.
Bain highlights the importance of harmonized global pricing strategies for brands to sustain consumption in mainland China. Despite ongoing uncertainties, Chinese luxury consumption is estimated to account for 22 to 24 percent of total global consumption in 2023, with forecasts predicting growth to 35-40 percent by 2030, cementing China’s position as a leading global luxury market.
This translated and edited post previously appeared on FashionUnited.uk.