MILAN, Dec. 17 (Class Editori) - China is going on to grow. A report published by Bain & company and T-mall luxury division highlights that the Chinese market share in the global luxury field has almost doubled in 2020. After a contraction recorded at the beginning of the year due to the health emergency, luxury purchases in the country have strongly increased. Restrictions and travel bans have led Chinese consumers to do shopping locally instead of abroad.
According to the China's unstoppable 2020 luxury market report of Bain and Tmall, an increase by 48 percent to 346 billion yuan (equal to 43.4 billion euros at today's exchange rate) is expected in Mainland China during the ongoing fiscal year. The hike will go on at least until 2025. A countertrend compared to the global luxury market, which will record a fall by 23 percent. China’s share, instead, has grown from 11 percent in 2019 to 20 percent this year.
Growth drivers have been four: the comeback of people who used to live abroad, the purchases by Millennials and the Z Gen, enduring digitalization and duty-free stores in Hainan. This has been pointed out by Bruno Lannes, senior partner of Bain based in Shanghai and one of the co-authors of the report. "One of the most interesting trends has been how brands have strengthened their relationship with online and offline customers", as Chris Tung- CMO of Alibaba group- has stated. Chinese consumers, as the manager has added, are high-sophisticated digital natives and they expect a unique quality shopping experience.
For instance, live streaming has been one of the ways in order to get in touch with the own audience. During the Global Shopping Festival of November, the main luxury companies have reached millions of views and interactions thanks to the development of new digital technologies. "Many brands are showing greater commitment to a global online strategy, including the presence on all the main social channels", as Carrie Zhang from Bain- author of the analysis as well- has explained.
In addition, the e-commerce channel has contributed to growth, by accounting for 23 percent of sales this year, compared to 13 percent recorded in 2019. According to experts, it is unlikely that the global conditions would be back to normal before 2022 or even 2023. Moreover, it is expected that Chinese consumers would be cautious in respect of international travels also after the borders' reopening. Therefore, the majority of luxury brands will continue to record a positive domestic increase during next year by almost 30 percent. This means that brands in Mainland China must convince customers that domestic shopping is the best and most sustainable choice.
(Source:Class Editori)
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