The Chinese luxury market could be the world’s №1

by Patrícia Fischer

INDUSTRY ANALYSTS PREDICT THAT CHINA WILL SOON BE THE WORLD’S LARGEST LUXURY MARKET, OVERTAKING THE UNITED STATES.

While the luxury markets of Europe and the United States have suffered from the pandemic mainly due to the absence of rich Chinese tourists, China’s wealthy citizens have contributed large sums to global luxury spending. By 2020, China had grown into the second largest luxury market in the world, valued at USD 44 billion. The US luxury market was estimated at USD 55 billion in the same year.

The segment is already quite significant and, according to international consultants Bain & Company, the Asian economy could become the world’s

WeChat is the way to consumers

Chanel has been ranked as the most active content publisher among luxury brands in 2022 on WeChat by iPaiban, a WeChat layout tool and data analysis platform. With email marketing largely absent in China, WeChat is the most effective way for brands to directly communicate with consumers via their official accounts. Most brands are registered as corporate accounts on WeChat, which allows them to push content to all of their subscribers four times a month. Chanel had the most total views on WeChat with its own content at 3,745,517 views, a 180.54 percent increase from 2021, iPaiban revealed after comparing WeChat data from Fendi, Prada, Hermès, Chanel, Louis Vuitton and Burberry. They respectively published 48, 38, 59, 72, 35 and 63 articles on WeChat in 2022.

largest luxury market by 2025 at current growth rates. As Bain & Company stated, China’s luxury market grew at roughly 48 percent in 2020. This growth was fostered by the introduction of travel restrictions due to Covid-19, as China’s wealthy spent their money in their home country instead of the traditional ”fashion capitals”.

Considering the significant increase in disposable incomes, the expansion of the nouveau riche and the tradition of giving gifts that is embedded in Chinese culture, the massive boom in the Chinese luxury sector in recent years is anything but surprising. In addition, a number of international players have appeared in the domestic market. Luxury brands that have faced challenges in other parts of the world tend to find their accounts in China.

The author is an economic journalist