Consultants Bain & Co project China will lead the way in luxury recovery and Chinese consumers will cement their status as crucial drivers of the industry, accounting for nearly 50 per cent of the market by 2025. The Chinese domestic market saw a strong rebound recently as lifting of lockdowns and travel restrictions led to big splurge on luxury products by consumers. Upscale cosmetic group Estee Lauder attributed its gradual recovery primarily to this remarkable rebound in China. In fiscal year 2020 ending June, Estee Lauder registered a double-digit growth in China on almost every channel and across all product categories for almost every brand, the company reported in late August.
Luxury skin care brands like La Mer also recorded double-digit growth on the Chinese mainland, whose iconic facial cream was priced at a somewhat prohibitive 2,500 yuan ($370).
Likewise, sales in China for most of LVMH's brands turned positive compared with a year ago in the second half of March, said Jean-Jacques Guiony, Chief Financial Officer, LVMH Group.
It's unsurprising to see a gradual pickup of the luxury market in China as people lack conventional retail channels for luxury purchases, such as duty-free shops and outbound trips, said Peng Yanyan, head of the China consumer sector at UBS Securities, which remained rosy about the sector's performance in the country.