China Transitions Into The World's Largest Market For Luxury Goods - Study

Vanessa Doctor

3 February 2011

China is expected to emerge as the largest market for luxury goods worldwide by the year 2020, a new study by CLSA Asia-Pacific Markets shows.

According to the research, titled Dipped In Gold: Luxury Lifestyles In China And Hong Kong, the steady growth of wealth in the country, coupled with the advancing spending culture, is the key driver for the developing affluent lifestyle. By 2020, the study said, China will account for about 44 per cent of world luxury sales, up from 15 per cent at present.

The rising luxury goods spending appetite in the Asia Pacific timezone as shown by the report will add to the continued perception that the region is a vital growth market for wealth management in general.

The number of high net worth individuals, or those with over 1 billion yuan in assets ($151.7 million) is experiencing an annual growth rate of 50 per cent, from just 24 in 2000 to a huge 1,363 in 2010, CLSA said.

"As incomes rise, China's burgeoning middle class is adopting a previously unattainable high-end lifestyle and is transitioning from a saving to spending culture. Younger and richer than their counterparts overseas, Chinese consumers enjoy displaying their wealth and success," said the report.

Some of the top luxury brands catching the Chinese' attention are Louis Vuitton, Gucci, Bulgari, and Hermes.