Hong Kong: China's luxury spending may more than double by 2015, surpassing Japan to become the world's largest market for branded goods, according to McKinsey & Co.
Sales of luxury items in China, including clothes, handbags, watches and fine jewelry, are expected to increase to about 180 billion yuan (Dh100 billion) in 2015 from 80 billion yuan last year, McKinsey said in a report yesterday. The 2015 estimate would be equivalent to 20 per cent of global luxury spending, the consulting company said.
LVMH Moet Hennessy Louis Vuitton and Hermes International are among luxury goods makers expanding in China as the nation overtook Japan to become the world's second- largest economy last year. Chinese Premier Wen Jiabao is promoting domestic consumption to bolster growth and reduce reliance on exports.
Far from saturation
"Even with the proliferation of luxury stores in recent years, China is far from reaching saturation," Yuval Atsmon, a principal at McKinsey, told reporters in Hong Kong. "Hermes's footprint in China still falls well short of its 45-store presence in Japan. This is true for other leading brands."
McKinsey's forecast echoes comments by Chinese Commerce Minister Chen Deming. Chinese domestic consumption of high-end products rose 23 per cent last year, and the nation may surpass Japan to become the world's biggest market for luxury goods by 2015, Chen said on Monday.
