China’s luxury goods market is experiencing explosive growth and is expected to reach 816 billion yuan ($112 billion) by 2025, according to a recent report by PwC China. This represents approximately 25% of the global total, making China a significant player in the world of luxury goods.
The Asia-Pacific region has been driving growth for the global luxury goods market, with China leading the charge. The country has the potential to become an even bigger player in the luxury goods market and is expected to realize this potential in the coming years.
One factor contributing to China’s booming luxury market is the offshore duty-free shopping in the southern Chinese island province of Hainan. The report released by PwC China showed that offshore duty-free shopping in Hainan accounted for 13% of Chinese consumer spending on luxury goods in 2021, raking in 49.5 billion yuan.
This growth is a testament to the increasing wealth of Chinese consumers and their willingness to spend on luxury goods. The trend of offshore duty-free shopping is expected to continue as more and more Chinese consumers are attracted to the tax-free shopping opportunities offered in Hainan.
Another factor contributing to China’s growing luxury market is the normalization of travel to and from Hong Kong and Macao. As the Chinese mainland has fully resumed travel to these regions, luxury consumption in Hong Kong is expected to gradually rebound. This will be a significant boost to the luxury goods market in China and will help to further drive growth in the coming years.
“China’s luxury market is rapidly recovering from the pandemic with greater strength, resilience and flexibility,” said Steven Zhong, ESG strategy lead partner at PwC China. The pandemic has caused many changes in the world of luxury goods, with many consumers shifting their focus to online shopping and the rise of e-commerce. Despite these changes, China’s luxury goods market has remained strong and continues to experience robust growth.
In conclusion, China’s luxury goods market is poised for even greater growth in the coming years. The offshore duty-free shopping in Hainan, the normalization of travel to and from Hong Kong and Macao, and the increasing wealth of Chinese consumers are all contributing to this growth. With a projected value of 816 billion yuan by 2025, China is poised to become an even bigger player in the world of luxury goods and to continue driving growth for the global luxury goods market.