By The Luxury Brands should pay close attention to where their cash is going and it is at home
The share of Chinese consumers’ high-end purchases made in mainland China more than doubled from 32% in 2019 to over 70% in 2020, according to Bain & Co. Luxury auto sales were resilient through the latter half of last year. Pricey and ultra-premium alcohol remained in demand. Fine wine prices, driven by Chinese buyers, were up 4% in the last quarter of 2020.
With the government promoting a so-called “dual circulation” policy, to generate demand and supply at home, consumer confidence is likely to stay strong. So even when Chinese shoppers can travel to Paris and Milan again, domestic spending won’t revert to pre-pandemic levels.
This has significant implications for the big luxury brands.
