Luxury goods retail in China
Chinese luxury consumers shopped a wide range of products, including watches, jewelry, fashion, cosmetics, fragrances, leather goods, and eyewear. Among all aforementioned categories, watches and jewelry contributed to nearly half of China’s luxury goods sales revenue. In a survey among over 1,500 luxury goods consumers from mainland China and Hong Kong, respectively, 86 and 85 percent of the respondents said they bought luxury watches and jewelry offline. For decades, brick-and-motor stores dominated China’s luxury goods retail market. The world’s top ten most valuable luxury brands all have their own stores in China, distributed mostly in economically developed regions.Nevertheless, the outbreak of the coronavirus pandemic has changed the shopping landscape of many Chinese luxury goods buyers. In 2020, approximately 23 percent of China’s luxury goods sales were sold on e-commerce platforms, increasing from merely 13 percent in the year prior. On the other hand, the thriving live commerce business also recorded a massive success among Chinese luxury goods buyers. A global survey suggested more than 60 percent of Chinese luxury consumers had bought something from a luxury brand during or immediately after watching their live-stream session.
Made in China, sold in China
There was a time when you stepped inside a luxury store anywhere in the world, no matter New York, Milan, or Dubai, Chinese shoppers are bound to be spotted. In 2015, more than three-fourths of the luxury consumption made by Chinese consumers happened overseas. However, the share dropped sharply due to rising spending limits in the Hainan duty-free zone and the COVID-19 travel restrictions. In 2021, it was estimated that domestic retail accounted for up to 98 percent of the luxury sales in China. In 2021, Hainan offshore duty-free recorded its highest sales since opening, with more than 80 percent yearly growth.The transition from abroad to China happened not just in shopping locations but also in preferred brands. Along with the rising cultural confidence and patriotism, an absolute majority of luxury consumers in China said they would support the domestic luxury businesses if the quality and the price were at the same level as foreign brands. Compared to the global luxury conglomerate, shoppers in China believed that local brands would better understand the customers’ tastes and perform more efficiently in after-sale care.
