Chinese consumers set to lead personal luxury goods market by 2030, according to Bain & Co

What Happened: Chinese consumers are set to become the most important demographic segment in the global personal luxury goods market, making up 35 to 40 percent of the total market by 2030, according to Bain & Co. and Altagamma.

Americans and Europeans will take the number two and three spots, with an estimated 22 to 24 percent and 16 to 18 percent of market share, respectively, Bain stated in its latest luxury market report.

Overall, the global personal luxury goods market, comprising apparel, cosmetics, jewelry, and watches, is predicted to have a promising future, growing approximately 2.5 times its 2020 size to reach an estimated 540 billion euros to 580 billion euros (approximately $586 billion to $629 billion) in 2030.

Two-thirds of the entire market will be driven by online and monobrand channels by 2030.

Breaking down the age demographics, millennials will dominate the personal luxury goods market with a share between 50 and 55 percent. Gen Z will comprise 20 to 25 percent, while Gen Alpha will claim about 5 percent.

But looking at the near future, slow growth is predicted for the luxury sector in 2024, with just a 1 to 4 percent rise at constant exchange rates over 2023, which is less than half of the 8 percent year-on-year growth expected to be seen by the end of 2023.

The Jing Take: According to Bain, China is expected to contribute up to 40 percent of worldwide luxury spending by 2030, up from 33 percent in 2019.

The report also predicts that buying habits will shift geographically toward mainland China. In 2019, the mainland’s shopping hubs drove only 11 percent of the personal luxury goods market sales, while the US and European regions contributed 62 percent of sales.

By 2030, mainland China stores will attract up to 27 percent of luxury sales, catalyzed by Hainan’s transformation into a duty-free island by 2025. Although the US and Europe will maintain their status as key global shopping centers, their collective geographical market share may drop to 46 to 50 percent.