On the southern Chinese island of Hainan, a duty-free shopping paradise, domestic tourists keen to spend will often patiently line up for an hour or more to enter a Gucci, Tiffany or other luxury brand store. “I’m mentally working on a shopping list,” says Zeng Rong, 34, a Beijing-based auditor who is looking forward to her upcoming Hainan trip. “I’d like to buy a Bottega Veneta bag as well as a coat and a down jacket from Moncler before the weather gets cold.” With the coronavirus pandemic having sent most of the world’s luxury spending into a tailspin and China the only major economy expected to show growth this year, high-end brands now depend more than ever on Chinese consumers like Zeng for sales. Their propensity to spend, which extends across China’s biggest cities, is spurring luxury brands to double down on the Chinese market – embracing e-commerce and pushing ahead with store openings whereas in most other countries such plans have been postponed or scaled down. Lavish events are also back. Louis Vuitton menswear designer Virgil Abloh held a spring/summer fashion show before a live audience in Shanghai in August. Prada hosted private viewings of its new collection last week – also in Shanghai, the country’s fashion capital, which has begun to replace Hong Kong as the favoured shopping haven for domestic tourists . Driven by well-heeled consumers forsaking their usual overseas trips to places like Milan and Paris, as well as pent-up demand that built during lockdown, spending in China on luxury goods has surged. China luxury spending expected to jump 30 per cent this year Prada has said the group’s China sales jumped 60 per cent in June and 66 per cent in July, while LVMH noted that in some weeks since March when the country came out of lockdown, Louis Vuitton and Dior have seen China sales more than double. “Mainland China has become the place where all the [purchasing] power is trapped,” said Mauro Maggioni, Asia-Pacific CEO at Italian luxury sneaker and apparel brand Golden Goose, which has 21 stores in mainland China. It also opened stores on China’s top e-commerce sites last month and plans to open a new location in Hainan soon. As luxury spending in China reaches new heights for some brands, the Chinese are set to account for around half of all global spending on high-end brands in 2020, up from 37 per cent last year, according to McKinsey & Company. That said, industry executives say it will not be enough to make up for the near absence of Chinese tourists abroad, who have been responsible for two-thirds of Chinese luxury spending. Total global luxury spending is expected to plunge as much as 35 per cent from last year’s US$300 billion, according to consultancy Bain. China is, however, the place to be. Store numbers for top luxury brands there rose four per cent in the first half of 2020, while those for cosmetics brands jumped eight per cent, according to a report by property consultancy Savills. “I can see the continuous potential of the Chinese market,” Michele Norsa, executive deputy chairman at Italy’s Salvatore Ferragamo, told an earnings briefing in September. The luxury shoe and accessories maker is reviewing its store network with a view to closing some in Europe and opening more in China. The Chinese government has long sought to bring some of the money splashed abroad by its citizens overseas back home. It cut import tariffs in 2018, enabling luxury brands to reduce their China prices, while this year in Hainan, it has expanded the amount of duty-free shopping allowed to 100,000 yuan (US$14,650) from 30,000 yuan, as well as the types and number of products allowed. Also, unlike many other countries where luxury spending tends to be the domain of older generations, China skews younger, with many luxury consumers between 25-35 – often the only child of the family and armed with money from indulgent parents. Younger Chinese shoppers also prefer e-commerce, and the world’s poshest brands have started wading into online sales in China, putting aside concerns about the potential for counterfeiters to take away their sales and the loss of the luxury shopping experience over the internet. Services such as live-streaming now give luxury brands the ability to more directly connect to shoppers, said Golden Goose’s Maggioni, adding that with online stores his brand could now reach shoppers in up to 100 Chinese cities. Tmall marketplace has seen 50 brands including Giorgio Armani and Alexander Wang open stores on its three-year old luxury platform this year and another 20 are expected to join by the end of the year, bringing the number to 220. Getting brands to join is not hard, Luna Wang, head of the division, said at a Tmall Luxury event last month, noting the far greater market penetration that comes with an online presence. “When the brands see the figures, they speed up,” she said. (Tmall, a business-to-consumer online retail site, is operated by Alibaba, owner of the South China Morning Post .)