Move over America and Japan, China’s taking over the luxury limelight. China is poised to become the world’s largest market for luxury goods by 2020, according to a new report from investment research group CLSA Asia-Pacific Markets. With fatter paychecks and stronger desires to display new wealth, Chinese consumers are building their appetites for designer handbags, watches, and clothing. They’re pushing up profits for high-end retailers, such as Louis Vuitton and Hermes, and are expected to carve out in the next decade a €74 billion, or roughly $101 billion, luxury market by the end of this decade, the report said.
To put that in perspective, that’s €24 billion more than what U.S. consumers, who still lead high-end purchases, spent on luxury last year, according to CLSA. It also exceeds last year’s spending in Japan, long known as the world’s main driver of growth in luxury consumption, by more than €50 billion.
By 2020, the luxury market worldwide should be worth €385 billion, CSLA says, meaning China would represent nearly twenty percent of the global total. Those numbers help explain why the world’s designers are all flocking from their homelands to put on big fashion shows for China’s rich and famous.