(Yicai Global) Jan. 21 -- China’s home market for luxury goods expanded 36 percent last year and is expected to become the world’s biggest by 2025, according to a new report by US consultancy firm Bain & Company.

Chinese consumers bought CNY471 billion (USD74.3 billion) of luxury goods in 2021, maintaining double-digit growth from the previous year after the figure almost doubled in 2020 and 2019, according to the report published yesterday.

The proportion of Chinese buying luxury goods in the country soared to a record high of over 90 percent last year, compared with 70 percent to 75 percent in 2020, as outbound travel was restricted by the Covid-19 pandemic, Bain noted.

China’s share of the global luxury market rose to 21 percent last year from 20 percent the year before, and it is expected to continue growing to become global No. 1 by 2025, regardless of any future pickup in outbound travel, said Bruno Lannes, a senior global partner at Bain.

The increasingly digitalized nature of the Chinese market is also a major factor driving growth of the luxury market, especially as the pandemic forced a lot of marketing activities to move online. Online luxury sales jumped 56 percent last year, while offline sales rose 30 percent. The overall penetration rate of online sales was nearly 26 percent.

Moreover, tropical tourist destination of Hainan has become a luxury consumption paradise due to the island province’s duty-free policy. Sales at Hainan’s duty-free shops skyrocketed 85 percent to CNY60 billion (USD9.5 billion) last year, contributing about 5 percentage points to the growth of China’s luxury goods sales. 

With the arrival of more duty-free operators, Hainan’s consumption potential will be further released, Bain added.

Editor: Futura Costaglione