The market for luxury goods in China composes a significant proportion of all

luxury goods In economics, a luxury good (or upmarket good) is a good for which demand increases more than what is proportional as income rises, so that expenditures on the good become a greater proportion of overall spending. Luxury goods are in contrast to n ...

sales worldwide. In 2012,

China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...

surpassed

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...

as the world's largest luxury market. According to a blue paper on commercial development in China, released in 2010 by the

Chinese Academy of Social Sciences The Chinese Academy of Social Sciences (CASS) is a Chinese research institute and think tank. The institution is the premier comprehensive national academic research organization in the People's Republic of China for the study in the fields of ...

(CASS), China's luxury goods market had increased to US$9.4 billion by the end of 2009. This accounted for 27.5% of the world's luxury goods market,China to be world's biggest luxury goods market in five years: blue paper
/ref> an increase from 25% in 2008.

People's Daily Online The ''People's Daily'' () is the official newspaper of the Central Committee of the Chinese Communist Party (CCP). The newspaper provides direct information on the policies and viewpoints of the CCP. In addition to its main Chinese-language e ...

, July 27, 2013. On current growth rates, the luxury goods market in China is expected to grow to

US$ The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...

14.6 billion by 2014.Keywords to learn China
''

The Korea IT Times ''Korea IT Times'' is a bilingual publication (Korean and English) with an eye on Industry & Technology, including the ICT field based in Seoul, South Korea. Publication Details: • Launch: July 2004 • Publisher: Korea ET Times Media Group ...

'', May 28, 2010.

Market characteristics

Chinese luxury goods consumers are younger than their

Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...

an counterparts, belonging to the 18-50 age group, compared to Europe's consumers who are generally in the over 40 age group. For this reason, China's luxury goods market is expected to grow faster than that of Europe's. Many of the young luxury goods buyers are self-employed or professionals. According to the consulting firm

McKinsey & Company McKinsey & Company is a global management consulting firm founded in 1926 by University of Chicago professor James O. McKinsey, that offers professional services to corporations, governments, and other organizations. McKinsey is the oldest and ...

, 80% of Chinese luxury goods buyers are under 45, compared with 30% of luxury goods buyers in the United States and 19% in Japan.China still has an appetite for luxury goods
/ref> Retail sales in China account for only 7% of global retail sales of luxury consumer goods; however, Chinese buyers account for 25% of global retail sales of luxury consumer goods. Many shops in international travel destinations have specialized staff devoted to Chinese customers. According to 2007 Global Luxury Survey by ''

Time Time is the continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, to ...

'' magazine, most luxury goods buyers in China buy luxury products as a

status symbol A status symbol is a visible, external symbol of one's social position, an indicator of economic or social status. Many luxury goods are often considered status symbols. ''Status symbol'' is also a sociological term – as part of social and soci ...

. The top five luxury watch brands in the country are

Rolex Rolex SA () is a British-founded Swiss watch designer and manufacturer based in Geneva, Switzerland. Founded in 1905 as ''Wilsdorf and Davis'' by Hans Wilsdorf and Alfred Davis in London, the company registered ''Rolex'' as the brand name of ...

Omega Omega (; capital: Ω, lowercase: ω; Ancient Greek ὦ, later ὦ μέγα, Modern Greek ωμέγα) is the twenty-fourth and final letter in the Greek alphabet. In the Greek numeric system/isopsephy (gematria), it has a value of 800. The wo ...

Cartier Cartier may refer to: People * Cartier (surname), a surname (including a list of people with the name) * Cartier Martin (born 1984), American basketball player Places * Cartier Island, an island north-west of Australia that is part of Australia' ...

Vacheron Constantin Vacheron Constantin SA () is a Swiss luxury watch and clock manufacturer founded in 1755. Since 1996, it has been a subsidiary of the Swiss Richemont Group. Vacheron Constantin is the second oldest Swiss manufacturer and one of the oldest watch ...

, and Breitling.Global Luxury Survey: China
''

TIME Time is the continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, to ...

''. In a confidential report titled ''"China Luxury Market study 2010"'' in November 2010, the management consulting firm

Bain & Company Bain & Company is an American management consulting company headquartered in Boston, Massachusetts. The firm provides advice to public, private, and non-profit organizations. One of the Big Three management consultancies, Bain & Company was fou ...

noted the top three luxury brands in China are

Louis Vuitton Louis Vuitton Malletier, commonly known as Louis Vuitton (, ), is a French high-end luxury fashion house and company founded in 1854 by Louis Vuitton. The label's LV monogram appears on most of its products, ranging from luxury bags and leather ...

Chanel Chanel ( , ) is a French high-end luxury fashion house founded in 1910 by Coco Chanel in Paris. Chanel specializes in women's ready-to-wear, luxury goods, and accessories and licenses its name and branding to Luxottica for eyewear. Chanel is ...

and

Gucci Gucci (, ; ) is an Italian high-end luxury fashion house based in Florence, Italy. Its product lines include handbags, ready-to-wear, footwear, accessories, and home decoration; and it licenses its name and branding to Coty, Inc. for fragrance ...

. According to the report, watches and bags led the growth of the luxury market in 2010. The report documented the top three luxury brands in the country for the following products: Following a ban instituted in October, 2012 on government agencies purchasing luxury goods, often used as "gifts", sales of luxury goods in China remained strong, but slowed, even falling slightly for some luxury retailers in the 4th quarter of 2012. As of February 2014 2/3rds of the luxury goods purchased by the wealthy in the People's Republic of China were purchased by tourists in Europe and the United States where, particularly in Europe, high-end retailers have hired staffed fluent in Mandarin."Catering to the Chinese Shopper’s Grand Tour"
article by Nicola Clark in ''

The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...

'' February 3, 2014

Luxury cars

Major global luxury brands like

Mercedes-Benz Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartere ...

, BMW,

Audi Audi AG () is a German automotive manufacturer of luxury vehicles headquartered in Ingolstadt, Bavaria, Germany. As a subsidiary of its parent company, the Volkswagen Group, Audi produces vehicles in nine production facilities worldwide. Th ...

, and

Lexus is the luxury vehicle division of the Japanese automaker Toyota. The Lexus brand is marketed in more than 90 countries and territories worldwide and is Japan's largest-selling make of premium cars. It has ranked among the 10 largest Japanese ...

have operations in China. Audi, which has dominated China's luxury car market for more than two decades, is the market leader in the luxury car segment, with China being Audi's second largest market in the world. However Audi's market share in this category is gradually falling as BMW and Mercedes-Benz are adopting new strategies to boost sales. According to data from

Global Insight Global Insight is an economics forecasting organization, serving over 3,800 clients in industry, finance and government, with revenues of over $95 million (in 2006) and employing more than 600 staff in 23 offices in 13 countries.Lamborghini Automobili Lamborghini S.p.A. () is an Italian brand and manufacturer of luxury sports cars and SUVs based in Sant'Agata Bolognese. The company is owned by the Volkswagen Group through its subsidiary Audi. Ferruccio Lamborghini (1916–1993) ...

, "China's super car market is growing faster than our expectations, while the Western markets are declining. The strong demand will soon make China our second biggest market after the United States. If the high taxes on luxury cars are removed, China could very well become the biggest market."Rich Chinese fueling luxury car market growth
''

'', April 29, 2010. As of 2013 the trend continued as the number of luxury cars and

SUV A sport utility vehicle (SUV) is a car classification that combines elements of road-going passenger cars with features from off-road vehicles, such as raised ground clearance and four-wheel drive. There is no commonly agreed-upon definiti ...

s shown expanded at the Shanghai auto show and plans were announced by both foreign and domestic auto manufacturers to introduce new models in China and increase production of larger cars.

Watches

Swiss shipments of high-end watches, favored as gifts meant to curry favor and caricatured as a symbol of corruption, after peaking in 2012, dropped off in 2013.

Jewelry

In April, 2013 sales of gold and

jewelry Jewellery ( UK) or jewelry (U.S.) consists of decorative items worn for personal adornment, such as brooches, rings, necklaces, earrings, pendants, bracelets, and cufflinks. Jewellery may be attached to the body or the clothes. From a western ...

were 72% higher than in April, 2012.

References

{{reflist Economy of China Luxury

Market characteristics

Luxury cars

Watches

Jewelry

See also

References