China to lead global personal luxury goods market by 2030

10 September 2023 Consultancy.asia 2 min. read
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Following a robust performance in the first half of 2023, China is expected to surpass the United States in terms of luxury spending, with 40% of the global market share by 2030. The Chinese market for personal luxury products is predicted to reach $61 billion already by the end of this year.

In the fairly dynamic post-Covid-19 landscape of the global luxury market, some trends and forecasts are beginning to paint a compelling picture of what is to come. According to analysis from Bain & Company, the personal luxury goods market is on a steady trajectory, projected to reach €362 billion by the end of the current year.

The anticipation is that by 2030, the market, encompassing jewelry, watches, cosmetics, and luxury clothing and accessories, will expand to an impressive $600 billion.

Source: Bain & Company

“The market is set for long-term growth, rooted on strong fundamentals,” said Federica Levato, partner at Bain & Company.

“Capturing and amplifying the market potential will be key, as the clear convergence among luxury markets allows for further expansion. Players have the opportunity, but also the responsibility, to reinforce their meaning, while leveraging strategic mergers & acquisitions to redefine the boundaries of the industry.”

Despite the rosy projections, the final quarter of the current year could also present a degree of uncertainty. Projections are a mixed bag, with some suggesting a potential 5% increase or, in a less optimistic scenario, a 5% decrease in market performance. This uncertainty is attributed to fragile consumer confidence, exacerbated by macroeconomic tensions and the recent pneumonia outbreak in China.

Interestingly, the reopening of China last year has played a pivotal role in reshaping the luxury market, with China poised to become a dominant player. Forecasts indicate that by 2030, China could capture up to 27% of all luxury sales. This surge will be, in part, fueled by the transformation of Hainan into a duty-free island by 2025. That is in line with China’s strategy to tap into consumer spending power in its most popular tourist destination.

Mainland China’s luxury market is currently growing at an impressive 9% annually, driven by both local consumers and tourists. In comparison, the rest of Asia is not at all far behind, boasting an 8% growth rate.

A previous report on the global luxury market also painted a positive picture, with projection that the market would grow by 10% to 12% this year to eventually reach $622 billion by 2030, double what it was valued at in 2020.