A woman buying diamond jewelry. (Chow Tai Fook)
RAPAPORT... Sales of luxury items in China have increased “exponentially” in 2020, led by growth in consumer demand for jewelry, according to Bain & Company.
Purchases of jewelry and leather goods on the mainland have risen approximately 70% to 80% since the beginning of the year, while ready-to-wear clothing and shoes grew about 40% to 50%, Bain noted last week in its China Luxury report, conducted together with Tmall. Luxury beauty spending has risen around 25%, and high-end watch purchases have increased about 20%.
“In 2020, brands actively developed and strengthened ways to connect online and offline channels,” Bain observed. “Brands are…carrying out loads of offline activities, such as fine-jewelry exhibitions and fashion shows, invitation-only product presentations, pop-up stores for seasonal collections, flagship launches and themed cafes.”
Growth has been accelerated by the reduction in international travel during the Covid-19 pandemic. Chinese consumers, who would previously travel to Hong Kong to purchase luxury products, have been “repatriated” and are shopping domestically, Bain explained. The increase was also boosted by positive consumer sentiment following lockdown, increased wealth, and the Chinese government’s moves to encourage shopping, such as distributing coupons.
China’s luxury goods market is expected to expand by 48% to CNY 346 billion ($52.81 billion) in 2020, doubling the mainland’s overall share of the global luxury market for the year, Bain said. The figure will continue to grow even after the coronavirus wanes, putting China on track to claim the biggest share of the market by 2025, Bain predicted.
“We expect China to progressively reopen its border. [However,] Chinese consumers will probably remain cautious about international travel even after borders reopen, and Hong Kong is unlikely to return to its precrisis level of luxury sales,” Bain added.
Source: Rapaport 21-12-2020