The Economics of Luxury
China's Luxury Shoppers
How Chinese consumers became the largest buyers of luxury goods, why they shop abroad, and how China's slowdown affected global luxury firms.
Chinese consumers became the world’s most important luxury buyers.
Rise
By around 2019, Chinese consumers accounted for roughly a third of global luxury spending, according to consultancy estimates.
Shopping abroad
- Many bought luxury goods overseas, in Paris, Hong Kong or Tokyo, where prices were lower.
- Daigou: personal shoppers bought goods abroad for Chinese customers.
Shifting home
- China cut import duties and brands narrowed price gaps.
- Hainan duty-free shopping grew.
- COVID travel restrictions pushed spending home.
Common prosperity
China’s “common prosperity” campaign from 2021 made displays of wealth less fashionable.
The slowdown
From 2023-24, China’s property slump and weaker confidence cut luxury spending, hurting brands’ results globally.
The lesson
Luxury firms depend heavily on a few markets, making them vulnerable to changes in one country.
Before the pandemic, Chinese tourists queued outside luxury stores in Paris, buying bags for themselves and friends back home.
Chinese consumers became the largest group of buyers.
- Chinese consumers became the largest luxury buyers.
- Many shopped abroad or through daigou.
- Common prosperity and a property slump cooled spending.
- Luxury firms are vulnerable to one market's changes.
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