Daily Times

Recent reports suggest that China’s luxury market is expected to usher in a rapid recovery in 2023, fueled by factors including a surge in offshore duty-free shopping.

According to the global management consulting firm Bain & Company, personal luxury sales in China shrank 10 percent year on year in 2022, ending its five-year streak of exponential growth, but positive conditions are expected to return before the end of the first quarter of 2023.

Xing Weiwei, partner with Bain & Company, said luxury consumption in China is expected to bounce back as the COVID-19 pandemic recedes, foot traffic in malls increases, and consumer confidence improves. “We expect to see 2021 sales levels sometime between the first and second half of 2023.”

A report by PricewaterhouseCoopers (PwC) suggests that China will continue to release growth potential as a main driving force of the global luxury market.

The PwC report estimated that China’s luxury market will reach 816 billion yuan (about 119 billion U.S. dollars) in 2025, accounting for about a quarter of the global luxury market share.

Younger generation, Chinese traditions, increasing internet penetration and the development of the duty-free market are future trends for China’s luxury market, the report added.

Duty-free shopping, with the island province of Hainan being the main channel, is breaking new ground in China’s luxury market. The impact of this trend is so significant that the PwC report described Hainan as being “strategically important for luxury brands to speed up expansion in China.”