Chinese shoppers to make up half of all luxury spending by 2025, says new study

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.”