Chinese consumers are one of the main drivers of the global luxury goods market, accounting for an increasing share of the global market, reaching 35 percent in 2019, with luxury goods consumption worth about 98.4 billion euros. The mainland luxury goods market continued its strong performance of the past few years in 2019, with overall sales rising 26% to 30 billion euros. From the perspective of the penetration rate of different categories of luxury goods among consumers, the penetration rate of ready-to-wear is slightly ahead. In 2020, the penetration rate of handbags and jewelry/watches increased significantly due to the properties of hedging and classic anti-cycle. It is expected that the global luxury goods market will fall by 25% to 45% in 2020, while China will increase by 20% to 30%, making the market the first to recover.

Chinese consumers dominate the luxury market, accounting for 35% of the global total

Chinese consumers are one of the main drivers of the global luxury goods market, accounting for a growing share of global spending. In terms of consumption scale, although it declined in 2016, it rapidly increased to 81.3 billion euros in 2017, with a year-on-year growth of 11.04%. In 2018, China's luxury consumption reached 86.5 billion euros, up 6.37% year-on-year, accounting for about 33% of the global luxury consumption. In 2019, luxury goods consumption in China amounted to about 98.4 billion euros.

Note: Consumption scale refers to the total amount of luxury goods purchased by Chinese nationals worldwide, including overseas purchasing power.

According to Data from Bain & Company and The Italian luxury industry association Fondazione Altagamma, Chinese consumers accounted for 35 percent of global personal luxury spending in 2019, up 2 percentage points from 2018, ***. The United States ranks the second in terms of regional luxury consumption, accounting for 22% in 2019. Europe ranks the third in the world, accounting for 17% of the market consumption.

Domestic luxury goods market continues to grow strongly, still lower than the overseas consumer market

Although China's luxury consumption power has become the first in the world, it is still dominated by overseas consumption. Although the proportion of domestic consumption in the total luxury consumption continues to increase, it is still less than one third. The amount of Chinese consumers' consumption abroad is far higher than that in the domestic market. In 2019, China's domestic luxury goods sales totaled about 30 billion euros, up 26% year-on-year.

The penetration rate of handbags and jewelry/watches has increased significantly due to the properties of hedging and classic anti-cycle

From the perspective of the penetration rate of different categories of luxury goods in consumers, the penetration rate of *** category in 2019 is 61%; Accessories and footwear followed, with penetration rates of 55 per cent and 50 per cent respectively in 2019. In 2020, due to the impact of the epidemic, consumers will have fewer social occasions, and their purchases of ready-to-wear clothing will be relatively slightly reduced, with the penetration rate dropping to 60%; At the same time, the epidemic has an impact on consumers' income expectations, and consumers are more likely to buy handbags with classic anti-cycle properties or jewelry/watches with good value preservation properties when purchasing luxury goods. In 2020, the penetration rate of handbags and jewelry/watches both increased to 50%.

The global luxury goods market will be hit hard by coVID-19 in 2020, and China will be the first to recover

Starting in 2020, the coVID-19 pandemic is sweeping the world and the luxury goods market has been hit hard. It is expected to fall between 25% and 45% from the previous year. In the depressed global market environment, Thanks to the proper control of the epidemic, the Chinese market has been the first to recover, and is expected to achieve a growth rate of 20-30% for the whole of 2020. The impressive performance of the market has also made China a major battleground for luxury brands.