Hey big spenders! China’s richest consumers will keep splashing out on luxury goods even as economy slumps, Bain says

Name: Rich Chinese man proposes with Lamborghini, rejected by Russian girl
Uploaded: 2023-02-07T11:28:30.000Z
Duration: 2 min 18 s
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The top 2 per cent of spenders will drive market growth in 2023 after Covid-19 restrictions ended a five-year winning streak last year, says Bain & Co

Middle-class shoppers, meanwhile, will refrain from buying big-ticket items, unnerved by worries about their job prospects and wages

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China’s wealthiest consumers will continue to splurge on luxury items like designer bags and watches as the economy reopens, says Bain & Company. Photo: Xinhua

Daniel Renin Shanghai

Published: 7:28pm, 7 Feb 2023Updated: 7:30pm, 7 Feb 2023

China’s wealthiest consumers will continue to splurge on luxury items like designer bags and watches as the economy reopens, even as middle-class shoppers refrain from buying big-ticket items, unnerved by worries about their job prospects and wages, according to Bain & Company.

The global consultancy said in its latest report on China’s luxury market that the top 2 per cent of mainland Chinese spenders, who account for more than 40 per cent of spending on luxury items, will be a key driver of market growth in 2023 after Covid-19 restrictions ended a five-year winning streak last year.

“There’s no reason why the VIC [very important customers] should stop buying [luxury items] in 2023, because even during the downturn in 2022 they were spending,” said Bruno Lannes, a Shanghai-based senior partner with Bain. “We will see more spending by them in 2023.”

Lockdown measures and standstill orders to guard against the spread of Covid-19 across the mainland in 2022 prevented millions of consumers from buying long-coveted personal care products or leather shoes.

As shopping malls grappled with a decline in foot traffic, sales skewed toward very wealthy customers, with some high-end brands achieving VIC sales higher than 40 per cent, Bain said.

02:18

Rich Chinese man proposes with Lamborghini, rejected by Russian girl

Spending on luxury goods in the mainland last year is estimated to have hit 425 billion yuan (US$62.65 billion), down 9.6 per cent from 2021 owing to the more stringent pandemic curbs, according to data compiled by Bain.

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