China's luxury products buying power is doubled despite the pandemic



China's luxury products market continues to boom even as this luxury industry's global sales deep decrease due to the impact of the pandemic.

Mainland China is the only major luxury products market to grow in 2020. The Chinese luxury marketplace has shown its "unstoppable" strength even when the COVID-19 pandemic has made the demand for expensive goods in the world very low.

China's luxury products buying power is doubled despite the pandemic

China's luxury products market continues to boom / ph: pexels

 According to a report from Alibaba shopping platform Tmall and consulting firm Bain, the Chinese luxury marketplace grew by about 48% this year to about $52.9 billion.

 Globally, mainland China's share of luxury products more than doubled from 11% last year to 20% this year.

Despite taking up a large share of the market, growth in the domestic market cannot offset the consumption of wealthy Chinese traveling abroad.

 Most of the rich in this country often spend huge sums of money to buy luxury products when traveling abroad.  Chances of travel are virtually absent this year, so Chinese consumers' overall spending on luxury products has fallen by about 35%.

 Bain and Alibaba predict the global luxury marketplace will shrink by 23% by 2020, as the pandemic continues to restrict travel and shopping in many places. However, China still is the bright spot of the global luxury marketplace in this year.

 China has concentrated all resources, quickly prevented early outbreaks, allowing its economy to grow again.  By April, consumers have been on the hunt for expensive handbags, shoes and jewelry, giving retailers glimmer of hope as sales in other markets decline.

Another factor behind this rapid growth is the mentality of "revenge spending" when many people want to be freed of their needs after days of limited travel, cities completely blocked off.  This sentiment causes spring sales of some companies like Tiffany (TIF) and Burberry (BBRYF) to rebound.

 Besides, the Chinese Government also has many incentives to encourage domestic consumption and encourage people to spend.  These solutions also fuel the luxury industry.

China is still the world's largest luxury marketplace. Great buying power is coming from mainland China.

Even before the pandemic broke out, however, wealthy Chinese spent more money at places closer to their home country.  Partly because of protests in Hong Kong (China), brands that have reduced the cost gap often make overseas branded products cheaper in China.

 Besides, the pandemic has led more people to shop online, and this habit will likely be maintained even after the pandemic ends.  According to statistics, nearly 40% of Chinese consumers plan to shop online more in the next few years, while another 40% are expected to maintain their current shopping activity ..

 It is estimated that next year, the growth of the Chinese luxury marketplace is forecast to continue although the pace will change.  Most brands believe that the market will expand by around 30% when international borders begin to reopen.

China\'s luxury products buying power is doubled despite the pandemic

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