Domestic consumers in lap of luxury
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China's luxury market is expected to grow at 18 percent annually during the next five years and will take more than 20 percent of the global market by 2015, driven by enthusiasm among the younger generation, an industry report said.
Sales of luxury goods grew 16 percent in 2009 and reached 12 billion yuan in 2010, according to a study by consultants McKinsey & Co. The report did not give comparative figures.
"The growth is powered by a growing number of consumers," said Yuval Atsmon, an associate principal in McKinsey's Shanghai office. "We expect sales in China to reach 27 billion yuan (US$1.83 billion) and China to take over from Japan to be the world's largest luxury market by 2015."
Luxury consumers in China are younger than global peers, and growth of consumption will be quickest among middle-class families with an annual income of between 100,000 yuan to 200,000 yuan, the report said - based on interviews with 1,500 consumers in 17 cities in China.
Forty-five percent of luxury goods were purchased by young people aged between 18 to 34 years old in China in 2010, while the figure was 37 for France and 28 for the United Kingdom.
Around 13 million middle-class families bought 12 percent of the luxury products in China in 2010, and by 2015, around 76 million such families will take up 22 percent of the market's sales.
The report also said that while China's 36 largest cities will remain the centers for the luxury market and will comprise of 76 percent of the market share by 2015, the increase of consumers will be "considerable" in emerging markets.
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