China’s growing taste for luxury goods is forecast to constitute half of the global market by the year 2025, according to a recent report by management consultancy Bain.
Worries have been cast over how China’s luxury industry will fare in the face of a US trade war and slowing demand in the world’s second largest economy. Retail sales growth fell to a five-month low in October.
Chinese consumers already account for 33% of luxury spending but will reach 46% by the middle of the next decade, said Bain in a report co-authored with Italian industrial group Altagamma.
Of these sales, half will be made on the mainland itself, says the report, marking a 25% increase from today’s rate.
Despite current threats to demand growth, the report remains optimistic about the long-term prospects of China’s luxury market.
“The market fundamentals are very sound,” Federica Levato, a partner at Bain, said. “There could be some slight slowdown in the near future, in the next 12 to 18 months, (but) we don’t think this will distract brands from a very solid market.”