BEIJING, March 20 (Xinhua) -- Sales on Chinese luxury market reached new highs in 2018, with a 20 percent growth for the second straight year, following its record-breaking growth in 2017, according to Bain & Company's annual China luxury study report on Tuesday.
Despite the robust growth of the market, differences remain among brands, with some luxury companies scoring a growth higher than 25 percent, while others lagging with less than 10 percent growth.
The robust sales of luxury goods in China are attributed to the increasing spending power among millennials and their growing exposure to global luxury brands as a result of digital and influencer marketing.
"Millennials will continue to be the main driver of the growth of this market in the future, as the average age of luxury consumers is much younger in China than anywhere else in the world," said report author, Bain & Company Partner Bruno Lannes.
Specifically, consumers aged 23 to 38 are willing and financially able to spend on luxury brands. A full 70 percent of China's millennials (born between 1982 and 2000) own their own homes. These young consumers are well informed about luxury and eager to embrace innovative trends such as the convergence of fashion and sportswear.
In addition, the Chinese government's reduction in import duties and stricter controls over grey markets, combined with brands' efforts to narrow the price gap with overseas markets, has led more Chinese consumers to make their luxury purchases in China, instead of taking journeys to such previous bargain locales as Hong Kong, Singapore, New York and London.
The report also noted that the digitalization helps the luxury sales inChina. While online penetration in most non-cosmetics categories remains low, sales continue to accelerate. Online luxury sales increased by 27 percent in 2018.
In addition, the middle-class consumers will represent an estimated 65 percent of all households by 2027, according to research conducted by Bain & Company for the World Economic Forum. All signs point to a continuing rise in the average per-capita income among China’s urban population.
"The growth of the China luxury market is expected to continue as the four engines continue to play out in the future," explained Lannes. (Edited by Jiang Feifan)
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