China's luxury market shrank 10 percent in 2022

China’s luxury market contracted 10 percent in 2022, according to insights published by consultancy firm Bain & Company on Tuesday.

After five years of successive growth, China’s zero-Covid policy slowed economic spending, Bain’s report said.

Despite the tough year for luxury brands in China’s market, the outlook is positive, with growth to resume in 2023.

Bain said all luxury categories were affected by the decline to varying degrees. Categories with strong online penetration were less affected by lockdowns and fared better. For example, with 50 percent online penetration, luxury beauty only contracted 6 percent.

In terms of segmentation, the watch market saw the steepest decline, with sales falling 20 percent –25 percent from 2021. Fashion and lifestyle categories experienced a 15 percent – 20 percent decline. Jewellery and leather goods performed slightly better, contracting 10 percent –15 percent.

The figures echo results from luxury players LVMH, Kering and other companies, however Bain states the fundamentals of consumption in China are still intact. “Compared to other emerging markets, China is a behemoth for luxury growth.”

Article source: Bain & Company report: Setting a New Pace for Personal Luxury Growth in China