Sales of luxury goods in China are skyrocketing — up around 20 percent from 2016 — in its sharpest growth since 2011, as Chinese millennials seek products like handbags and cosmetics, Reuters reported.
Within China, sales of brands from Gucci to Chanel, which have been sluggish for years, rose at the fastest pace in five years in 2016 and are positioned to consolidate those gains in 2018. Sales of luxury goods in China reached 142 billion yuan ($22.07 billion) in 2016 in a 20 percent increase from the prior year, Bain & Co said in a report on Wednesday.
As the biggest spenders of luxury products in the world, Chinese consumers made up 32 percent of the €262 billion spent in the global market last year, fueling sales at France’s LVMH, Burberry and Gucci owner Kering. 2017 saw a global recovery of the luxury retail market due to their affinity for high-end brands.
Capitalizing on the trend, French fashion retailer Louis Vuitton, part of LVMH, launched an eCommerce website in China in 2017. Louis Vuitton, which opened its first store in Beijing in 1992, offers items from leather goods to shoes on its website.
The popularity of luxury brands with Chinese consumers is also affecting the payment industry in the U.S., with Alipay, the digital payment arm of Alibaba, announcing last Thursday (Jan. 11) that it had entered into a partnership with French apparel brand Lacoste that will enable Alipay acceptance in select U.S. stores.
In a press release, Alipay, which is Lacoste’s exclusive partner, said technology firm Verifone would facilitate Alipay QR code payments using its Verifone e355 mobile point-of-sale (mPOS) terminal. According to Alipay, the two companies began working together in 2016 to enable merchants in both Europe and North America to accept Alipay in stores.
In addition to accepting Alipay as a payment method, merchants with the Verifone mPOS can create marketing campaigns that target Chinese consumers who use Alipay. The payment service said that approximately 3 million Chinese tourists visit the U.S. every year, with Chinese travelers spending a whopping $33 billion in 2016 in the States alone.