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 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, respectively, 50 and 61 percent of the respondents said they purchased luxury watches and jewelry offline. For decades, brick-and-mortar stores dominated China’s luxury goods retail market. The world’s top ten most valuable luxury brands all have their own stores in China. Despite the challenges of the Zero-COVID policy, China still accounted for 41 percent of the new luxury store openings globally in 2022.Nevertheless, the outbreak of the coronavirus pandemic has changed the shopping landscape of many Chinese luxury goods buyers. In 2021, approximately 21 percent of China’s luxury goods sales were sold on e-commerce platforms, increasing from merely 13 percent in 2019. On the other hand, the thriving short video and social media commerce also contributed massively to China’s luxury retail. In 2023, WeChat, Douyin (Tik Tok), and Xiaohongshu (RED) saw a significant increase in popularity and were among the 10 leading online luxury shopping channels.
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. According to a 2023 survey, Chinese luxury shoppers preferred to buy luxury goods in mainland China due to attentive service and comfortability.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.