Thanks to Chinese shoppers’ affinity for luxury brands, a global recovery of the luxury retail market is underway so far this year. That’s according to a report released by Bain & Company and Altagamma Foundation and covered by news website Jing Daily.
According to the report, the global luxury goods market is expected to increase 6 percent at constant exchanges rates in 2017, which comes after a year of flat growth in 2016. The total market value is set to reach about €262 billion, or $304 billion. Bain & Company had said at the midpoint of the year that luxury brand growth would be between 2 and 4 percent, but recently raised it even further. Robust sales from the Chinese tourism market and the rise of millennials shoppers around the globe are adding to the increase. Bain called the growth rate a healthy “new normal,” noted the report.
As for the Chinese economic market, Bain is forecasting growth of around 15 percent and predicts shoppers in China will represent 32 percent of global luxury goods consumption this year. Consumers’ renewed confidence in economic development in China is fueling the increased spending at luxury stores for high-end goods, noted the report.
The report also noted that the 15 percent growth rate in spending at luxury stores in China is more than twice the growth rate of any other country or region for 2017. Excluding Japan, the Asian market is expected to see 6 percent growth in sales of luxury personal goods. Hong Kong and Macau are expected to return to positive growth rates this year, although retail spending in South Korea and Taiwan isn’t expected to see any growth in 2017. Japan is slated to see growth of 4 percent in luxury goods, driven by Chinese tourists visiting the country as well as spending by local consumers. Those are the same reasons Europe is expected to also see 6 percent growth this year, the report stated.