Milennials and Gen Z shoppers have helped China double its overall share of the global luxury market in 2020, to become the largest in the world by 2025, even after the market is on track to pre-epidemic levels She returns
Despite the COVID-19 epidemic, the Chinese luxury market will grow 48% this year to 346 billion yuan, according to a report by shopping platform Alibaba BABA
And consulting firm Bain & Company, published on 16 December.
The global luxury market shrank by 23% in 2020, the report said, titled “China’s unstable 2020 luxury market”. However, China’s market share almost doubled, from about 11% last year to 20% in 2020.
Bruno Lanes, Shanghai’s senior partner at Bain, identified four factors driving a rebound in the mainland China market: forward repatriation, millennials and General Z shoppers, continuing digitization, and Hainan duty-free stores. Subsequent sales increased 98% compared to 2019, reaching RMB 21 billion by the end of October 2020.
Amid the unprecedented decline in global travel, many international luxury-goods groups have highlighted the increasing importance of sales to offset the dependence on tourism in China.
Gucci, a fashion label owned by the French group Kering Kerr.
Announced last week that it would open two major stores on Alibaba’s online luxury-shopping platform, which has more than 750 million Chinese consumers.
The first store to sell fashion accessories will open on December 21, while a second store focused on beauty products will launch in February 2021 and will be operated by Gucci’s license partner Coty Coty.
“Gucci has invested strategically and established a ‘digital first’ approach globally,” Gucci President and CEO Marco Bizzari said in a statement on Friday.
Shares in Kering, which are down nearly 7% so far this year, were down more than 2% in early European trade on Monday.
Read: Burbari returns to sales growth but luxury-goods recovery may stall
American Jeweler Tiffany & Co TIF,
Being bought by the French luxury giant LVMH MC,
For $ 15.8 billion, Wall Street beat expectations for quarterly profit in November, as it benefited from more than 70% growth in sales in China.
“One of the most exciting trends coming out of the luxury market in 2020 is that brands have actively developed and strengthened their connections with consumers both online and offline,” said Chris Tung, Chief Marketing Officer, Alibaba Group. Have done
“Global luxury brands have adopted new digital devices such as live streaming for consumer education or product presentation,” said Tung.
Further growth in the Chinese market is expected through 2025, as Gen Z – those born after 1995 – and millennials – those born between 1980 and 1995 – continue to spend on luxury Huh.
Of those peers, nearly three-quarters of current consumers have stated that they will increase or maintain their luxury spending in 2021.
However, the report states that it is unlikely to return to normalcy before 2022 or 2023 globally. “Chinese consumers are likely to be cautious about international travel even after the borders reopen.” Domestic growth will continue at around 30% levels in 2021.