"China Luxury Market Sales Down 20% Last Year... Largest Decline in 13 Years"

Sharp Decline Due to Domestic Demand Slump
Market Size Shrinks Back to 2020 Levels

Sales in the Chinese luxury market plummeted by 20% last year, marking the largest decline since 2011.

Bloomberg News reported on the 22nd, citing a report from consulting firm Bain & Company, that sales in the Chinese luxury market dropped by 20% last year, showing the steepest decline since 2011. According to the report, although the Chinese luxury market experienced rapid growth in recent years, it sharply contracted last year due to a domestic demand slump, shrinking the market size back to 2020 levels.

Tourists shopping at a duty-free shop in Seoul. Photo by Yonhap News

In particular, sales of high-end watches and jewelry fell by more than 30% compared to the previous year, representing the largest decrease. Leather goods and apparel followed. Bloomberg News stated, "This year will also be a challenging year for the Chinese luxury market," adding, "Especially in the first half of the year, luxury sales in mainland China are expected to remain flat."

The report pointed out that ongoing economic difficulties, including the collapse of the Chinese real estate market and high youth unemployment rates, have dampened consumer sentiment, leading consumers to seek alternatives such as the "gray market," where parallel imports are traded, instead of purchasing luxury goods. It further explained that the so-called "VICs (Very Important Clients)," the top affluent customers of luxury brands, are also becoming more conservative in their spending due to the economic downturn and are focusing on diversifying their investment assets.

In Hainan, known as a "duty-free paradise" within China, luxury sales reportedly declined by about 29% last year due to domestic demand contraction and increased overseas spending by Chinese consumers. The report also noted, "Last year, Chinese consumers' overseas luxury spending recovered to half the level of 2019, before the COVID-19 pandemic, in Europe," while "in Japan and other Asia-Pacific regions, it reached about 120% of that level."

However, Bain & Company forecasted a positive long-term outlook for the Chinese luxury market, noting that China still has one of the largest luxury consumer populations in the world.

This content was produced with the assistance of AI translation services.