The global luxury-goods market will grow 10 per cent annually over the next three years, thanks mainly to demand in emerging markets, according to estimates by CLSA Asia-Pacific Markets.
The luxury market grew by a robust 14 per cent last year to a record GBP197 billion (HK$2.5 trillion), CLSA data shows.
'Mainland Chinese contribute about 33 per cent of the sales of some of the brands, which include Gucci and Prada,' Aaron Fischer, head of consumer and gaming research at CLSA Asia-Pacific Markets, said.
He said the key drivers for the growth this year included emerging-market consumers, especially those travelling abroad. 'That is really an important part,' Fischer said. More than half of the sales in key European cities, New York and Hong Kong were mainland Chinese visitors, he said.
World Luxury Association statistics show that during the Lunar New Year, mainlanders spent US$7.2 billion overseas. Europe was the biggest beneficiary, attracting 46 per cent of the spending, and 35 per cent was spent in Hong Kong, Macau and Taiwan, the association said.
'For sure, the No 1 choices for mainland consumers [are] Hong Kong and Macau,' Fischer said.
'But what we would expect to see - and what has been happening over the past several years - is a much faster increase in travelling to Europe. But Hong Kong will always be No 1.'
Mainlanders are also the biggest group of duty-free shoppers in the world, accounting for 19 per cent of the total sales, according to the CLSA report Dipped in Gold.
The other factors that support the growth include continued price rises in the sector's top brands, and signs of improvement in developed markets. 'In developed markets the demand has been very weak,' Fischer said. '[But] we have seen some slight signs of recovery in these markets.'
CLSA said the emerging markets, many of which are in Asia, accounted for about half of the global luxury goods market, a share that was expected to surge to 73 per cent by 2020.
The retail value of luxury products in Hong Kong equates to 2.7 per cent of the city's economic output. The luxury sector is 1.44 per cent of GDP in Italy, 0.62 per cent in Britain, 0.5 per cent in the US, and 0.18 per cent in mainland China.
Mainland economic growth is expected to slow from its long-standing double-digit pace, but Fischer said he did not think it would dent luxury purchases by Chinese consumers.
'Basically the penetration is still very low,' he said. 'The penetration of luxury goods in Hong Kong is super-high and I can't imagine it increasing much more.'