For many years, domestic sales of brands like Gucci and Chanel have been sluggish in China but have shown a rapid increase last year in over half a decade and are expected to contribute to gains this year. Last year’s sales of luxury goods reached $22.07 billion which was up 20% from the year prior. This marks the sharpest gain since 2011 when sales started to get hit by slower economic growth and a fierce crackdown on corruption. Luxury item shopping make up 32% of the 262 billion euros global market last year.
This rise in spending is mostly due to strong growth for women’s clothing, handbags, jewelry, cosmetics, and shoes. Beijing has been cracking down on shopping agents called “daigou” from bringing goods into China from overseas as well as cutting high tax rates on imported luxury goods sold in that country. China’s domestic market makes up 8% of global luxury sales and Beijing has been pushing for bigger domestic spending.
Fueled by millennials between the ages of 20 and 34, the luxury market in China is expected to see growth this year due to the increased preference of ready to wear and fast fashion over more traditional designs. This can also drive consumers towards luxury casual wear and sports wear.