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China will be the largest luxury market in the world

Bain predicts China will be the largest luxury market by 2025. This is after Chinese spending has doubled in this sector between 2019 and 2021.
Bain states that luxury leather goods, fashion jewellery, and cosmetics sales are on the rise in China. They will surpass all other markets within three years.
According to the consulting firm, more than a fifth global consumer spending on luxury goods in 2021 was made in China. This is due to online shopping and duty-free shopping.
China accounted for around 21 percent of the global luxury product spending in 2021. Bain & Company predicts that the Chinese will be the largest luxury market in the world by 2025.

The China Luxury Report 2021 by the global management consultancy firm highlights that domestic sales of personal luxurious goods in China’s mainland grew 36% year-on-year to almost 471 billion Yuan (US$74.4 trillion) in 2021. Comparing to 2019, the sales figure was almost twice as high.

Millennials and Gen Z shoppers are the best clients of luxury brands

Gen Z shoppers continue to emerge as a source for market growth and a driver of increased digitization, while millennials make up the core of Tmall’s luxury fashion, lifestyle, and beauty customers. These shoppers are a smart target audience for brands that know how to recognize their interests and preferences. This includes cross-brand collaboration and personalized products.

chinese luxury tourist on a boat


Digitalization is the key in China

With the rising influence of younger consumers, luxury brands in China are expanding their online presence. Omnichannel expansion was increased across brands’ virtual and physical footprints as well as cross-channel efforts like luxury livestreaming from pop up shops. However, online and offline marketing activation at current scale is very expensive and is a major driver of the performance gap among smaller and larger brands.
Last year, different categories of luxury goods experienced growth at different rates in China. With a growth rate around 60 percent, leather goods grew fastest followed by fashion clothing and jewellery.

Hainan and Chinese tourists

Duty-free shopping in Hainan , a southern Chinese island region, has aided the growth of the country’s luxury market. Last year, about 95% of Hainan’s duty-free sales were from personal luxuries. According to the report, more than half of the goods sold were cosmetics from luxury brands.

Fashion 2025: How brands should navigate in China?

China’s online luxury sales grew by 56 percent in 2021. This is much faster than offline stores, which are the primary and conventional distribution channels for luxury products.

The Covid-19 pandemic, and the related travel restrictions, have had an effect on where purchases were made. More than 90% of Chinese consumers spent on luxury goods domestically.

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To sell luxury products, use Chinese e-commerce platforms

  • Xiaohongshu Luxury and High-end Products
  • Xiaohongshu social commerce is very interesting for the luxury market. It’s a mixture of Amazon, Pinterest, Instagram. It’s a content-driven model that places great emphasis on content. It started as a shopping guide. It attracts customers who value authenticity and quality.
  • Comments and posts should educate users about a product rather than just advertising it. Social media is a popular platform for product recommendations.

There are six types:

  • Tutorials (how to use the product)
  • Comparison (differences between products)
  • Before/After (pictures of the before and after, and an explanation on how to get the result),
  • Story (The Kol shares a personal story which can be used to educate the user)
  • Guide (a list of products that the Kol would like to purchase),
  • Try-on (pictures of the Kol trying on the dress in the shop’s fitting room and comments).


Tmall Luxury Pavilion: Ecommerce in China is not something to be afraid of for luxury brands


Tmall, China’s largest e-commerce platform, launched the Luxury Pavilion in 2017. The app currently houses 28 brands. The Luxury Pavilion is, in reality, a communication channel that targets a different audience than what they use in Europe. Tmall is estimated to bring in around 15,000 euros per year and an average Chinese consumer spends 90,000. RMB each year.

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The young Chinese are seeking high-quality products from well-known brands, as well as niche companies. The Luxury Pavilion is an invaluable tool for luxury brands to communicate with their current consumers and to better understand the future buyers.

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