China set to be the engine of global luxury spending, with young consumers powering the strong growth, according to a report released Friday by global consultancy McKinsey & Company.
According to the 2019 McKinsey China Luxury Report, China achieved more than half of global luxury consumption growth between 2012 and 2018, and is expected to increase its global spending by 65% by 2025.
According to the report, it is expected that by 2025, the consumption of luxury goods by Chinese consumers will nearly double, reaching 1.2 trillion yuan ($178 billion), accounting for 40% of global consumption.
It points out that young Chinese consumers are reshaping global luxury goods.
China has 19.8 million and 16.9 million luxury consumers born in the 1990s. The report shows that they accounted for 71% of the country’s total luxury consumption, accounting for 79% of total luxury consumption in 2018.
According to the report, most of these young consumers are fresh, which is both an attractive opportunity and an implicit requirement for the brand to remain current.
“Therefore, there are plenty of opportunities for brands to seek to attract consumers to the world’s most profitable, fastest-growing luxury market,” it said.
