Insights into China's luxury market growth in 2024

After a robust rebound in 2023, China's luxury market is anticipated to grow at a mid-single-digit rate in 2024, according to Bain & Company's China Luxury Report.

The market saw a 12 percent YoY increase in 2023, recovering from the pandemic-induced decline in the previous year. While the first half of 2023 witnessed a strong rebound, the second half experienced weaker growth due to declining consumer sentiment among middle- and high-income individuals. The recovery was supported by all categories, with Fashion and Lifestyle, Jewelry, Leather Goods, Beauty, and Watches showing varying growth rates.

Two key trends shaping China's luxury market in 2023 and beyond include the return of luxury shopping overseas and the evolution of Daigou. With Chinese overseas tourism resuming, domestic luxury spending is expected to decrease, and overseas luxury shopping has witnessed a significant resurgence. Pricing gaps between luxury goods in China and other markets have contributed to the attractiveness of shopping abroad. Additionally, the Daigou market is evolving, with more professional models emerging, particularly in the Fashion and Leather Goods sector, adopting a platformized approach.

Bain emphasises the importance of harmonised global pricing strategies for brands to maintain consumption in the mainland market. Although uncertainties persist, Chinese luxury consumption is estimated to account for 22-24 percent of the world's total in 2023, with projections indicating growth to 35-40 percent by 2030, solidifying China's position as a leading global luxury market.