Luxury sales in China to rebound to 2021 levels this year

This comes after the luxury market contracted in 2022. 

Luxury sales in China are expected to reach its 2021 sales level this year after contracting in 2022, Bain & Company reported. 

Personal luxury market sales in China contracted by 10% year-on-year in 2022 for the first time in five years. 

Bain & Company linked this to COVID-related lockdowns in the second quarter of the year as well as the weaker consumer sentiment resulting from the decline in the real estate market and the higher unemployment amongst others. 

“Luxury consumption will recover as COVID subsides, mall traffic improves, and consumer sentiment rebounds. We expect to see 2021 sales levels sometime between the first and second half of 2023,” Weiwei Xing, a Hong Kong-based partner at Bain & Company said. 

“While optimism abounds, there are also risks. Brands need to resolve pricing gaps between China and Europe before international travel resumes. In addition, as more Chinese HNWIs are residing outside of China, luxury brands must deliver excellent experiences everywhere in the world.”

Read more: China’s luxury market sees more ‘Very Important Clients’ despite 2022 contraction

Despite this contraction, Bain & Company observed higher sales from Very Important Clients as the economic downturn largely affected entry-level luxury consumers.