The mainland's luxury goods market is expected to grow 23 per cent to a record 84.3 billion yuan (HK$97.7 billion) this year, making it the fastest growing consumer of leather goods and jewellery worldwide.
The global luxury goods market has continued to improve this year in the wake of the financial crisis, with total sales expected to reach Euro168 billion (HK$1.7 trillion) this year, according to a report by Bain & Company.
The Asia-Pacific region, including China, has recorded a growth rate of 22 per cent, outperforming the other parts of the world. The United States, the number one spender on luxury goods, has also seen a strong rise of 12 per cent. Spending in Japan, the second biggest market, was down for the third year in row, dropping 1 per cent.
Bruno Lannes, a partner with global consulting firm Bain, says China is likely to exceed Japan within five years in terms of luxury spending, thanks to robust economic growth, a rise in middle-class families and an aggressive store-opening strategy by big brands.
The 15 brands surveyed by Bain had opened more than 80 new shops by the end of August this year, with two-thirds of them in second- and third-tier cities.
'The second- and third-tier cities are the new battlegrounds,' Lannes said. 'In fact, people's brand awareness and willingness to spend in these cities are already close to mega-cities like Beijing and Shanghai.'
Compared to most developed countries, luxury goods consumers on the mainland are much younger. The core age group studied by the report is between 25 and 44, while the mainstream buyers in places like Japan and Europe are older than 40.