Chinese shoppers at home and abroad are pushing global sales of luxury items to new heights, helping the sector post its third straight year of strong growth since the global recession.
A new study by Bain & Company released Monday forecasts the global luxury goods market for clothing, accessories, jewelry, cosmetics and art will grow 10 percent this year to €212 billion ($274 billion) from €192 billion in 2011. That would be the third straight year of double-digit growth following two years of contraction in 2008 and 2009 when many countries around the world slid into a deep recession following a banking crisis.
Claudia D'Arpizio, a Bain partner and lead author of the study for Italy's luxury trade association Fondazione Altagamma, called concerns about market weakness "overblown."
While the global economic crisis that began in 2008 has shown few signs of abating in pockets, particularly in Europe, the luxury sector overall has been in recovery since 2010, when high-end consumers resumed their easy spending habits.
Bain expects spending for the fourth quarter to increase by 7 percent in 2012 over last year, a period boosted by the Christmas gift-giving season.
The increase is being shored up by Chinese consumers, who this year became the top luxury buyers responsible for 25 percent of global purchases. By nationality, Europeans contributed 24 percent to global sales, Americans 20 percent and Japanese 14 percent.
Tourists are expected to make 40 percent of all luxury purchases this year, with the Chinese leading the way thanks to easier visa policies, Bain said. Chinese tourists are making one-third of purchases in Europe, helping to shield the luxury sector from the ongoing financial crisis. Growth in Europe is projected at 5 percent, half of last year, for total estimated sales of €75 billion.
Chinese shoppers aren't just spending their new-found wealth abroad though.
Bain found that the market comprising China, Hong Kong, Macau and Taiwan, is forecast to surpass Japan to become the sector's second-largest market worth €27.3 billion, behind the United States with sales of €65 billion forecast.
Bain forecasts annual global growth in the personal luxury goods market of 4 percent to 6 percent through 2015 when it is expected to be worth a quarter of a trillion euros.