China’s rich spent US$54 billion at home on luxury goods last year with coronavirus halting overseas trips

The coronavirus presented affluent families in China with a new challenge last year: just how were they going to spend some 350 billion yuan (US$54 billion) of disposable income on luxury items like jewellery and watches with overseas travel and shopping virtually impossible.

“Before the outbreak, we would travel abroad a lot every year, or even live for a while away from the mainland. Last year I turned to shop more for watches, diamonds and gold to compensate for the regret for not being able to travel abroad,” said Rachel, who lives in the southern city of Shenzhen with her husband who runs an e-commerce company.

Sales of luxury goods in China soared 48 per cent last year to 346 billion yuan (US$53.5 billion), according to a report released by global management consultancy Bain & Company and the luxury division of online retailer Tmall last month.

China’s share of the global market almost doubled to 20 per cent in 2020, according to the report, with the leather goods and jewellery sector leading the surge with gains of over 70 per cent. Ready-to-wear clothing also improved by more than 40 per cent, with luxury beauty spending up 25 per cent and high-end watch purchases up 20 per cent.

“I didn’t specifically calculate how much I spent on household consumption and I think I personally spent about 600,000 yuan (US$93,000) on my own hobbies, shopping and domestic travels,” added Rachel, who put her family income in the millions of yuan last year on top of the soaring capital growth from their properties in the city.