Bain: China's personal luxury goods market is expected to reach 471 billion yuan in 2021

Beijing News Shell Financial News (reporter Chen Weicheng) Due to the restriction of outbound travel, most Chinese consumers still choose to buy luxury goods in China. On January 20, Bain & Company released the "2021 China Luxury Market Report", showing that it is expected that China's personal luxury goods market will achieve 36% growth in 2021, reaching nearly 471 billion yuan.

The report points out that as in 2020, the growth of China's luxury market in 2021 will vary significantly between different brands, with growth rates ranging from 10% to more than 70%. The growth rate of different categories also varies greatly, with leather goods taking the lead with a sales growth rate of about 60%, fashion and lifestyle categories following with a growth rate of about 40%, jewelry categories with a growth rate of about 35%, and high-end watches and luxury cosmetics are expected to grow by about 30% and 20% respectively.

However, the market performance in the first half of 2021 is extremely differentiated: the first half of 2021 in major categories has grown rapidly, with year-on-year growth rates ranging from 40% to 100%, while the year-on-year growth rate of some brands in the second half of the year is expected to fall from 0% to 25%.

Hainan Duty Free Shop is a major emerging luxury consumption mecca in 2019, with sales growth exceeding 120% in 2020. In 2021, Sales of Hainan Duty Free shops are expected to grow by about 85% to about 60 billion yuan, accounting for about 5 percentage points of total sales growth in China's domestic luxury market. Personal luxury goods account for about 95% of hainan duty-free sales, of which more than 50% of sales come from luxury beauty.

Online luxury sales in all categories are growing faster than offline, and the report expects China's personal luxury online sales to grow by about 56%, compared with 30% offline. Excluding sales from Hainan duty-free shops, the overall online penetration rate of China's luxury market will reach about 19% in 2021. If you count the online penetration rate of Shanghai Nan Duty Free, the overall online penetration rate of China's luxury market will reach nearly 26%.

In 2020, due to the obstruction of outbound travel due to the epidemic, the Chinese market accounted for 70% to 75% of Chinese consumers' global luxury spending, a record high. In 2021, the proportion will further rise to more than 90%. Bain believes that the overall growth rate of personal luxury goods will remain low in double-digit growth in 2022. Compared with the situation in 2021, it is expected that the growth rate in the first half of 2022 will be slower, and the force will be concentrated in the second half of the year.

Bruno, senior global partner at Bain & Company, said: "From a global perspective, the proportion of the Chinese market in total global luxury consumption will rise from about 20% in 2020 to about 21%. We expect this growth trend to continue in the future, and regardless of the progress of the future recovery of outbound tourism, the Chinese market is expected to become the world's largest luxury market by 2025. ”

Proofreading Liu Baoqing