China is set to be the engine of luxury consumption globally as young consumers are driving strong growth, according to a report released today Friday by global consulting company McKinsey & Company.
China accounted for more than half of global growth in luxury spending from 2012 to 2018 and is expected to contribute 65 percent of global additional spending by 2025, according to the firm’s China Luxury Report 2019.
Chinese consumers are expected to nearly double their current luxury consumption to 1.2 trillion yuan (178 billion dollars) by 2025, representing 40 percent of the world’s spending, the report said.
Young Chinese consumers are reconfiguring global luxury.
China has 16.9 million consumers of luxury products born in the 1980s and 1990s. They make up 71 percent of the country’s total luxury consumers and accounted for 79 percent of total luxury spending in 2018, according to the report.
Most of these young consumers are new to the market, representing both a tempting opportunity and an implicit imperative for brands to stay current, the report says.
“As a result, opportunities abound because brands seek to capture the attention of consumers in the world’s most lucrative and fastest-growing market,” it underscores.