Luxury Goods Trade in China: Growing Market
Quick Overview: Challenges Across All Categories All luxury goods categories faced challenges, though their impact varied by category. The beauty sector – especially fragrances, color cosmetics, and ultra-premium skincare – showed stronger resilience as consumers seek emotional and sensory experiences. The fashion sector saw smaller declines compared to leather goods, largely due to its seasonal nature and the importance of the Very Important Customer (VIC) category. Overseas Shopping and Gray Market In 2024, there was a notable recovery in overseas shopping, especially in Japan, accompanied by significant growth in the gray market due to increased price differentials. Price differentials between luxury goods in mainland China and other markets, especially Japan, affected the mainland market and played a crucial role in reviving overseas luxury shopping. Future Outlook In 2024, China’s luxury goods market failed to maintain its previous growth trajectory, facing unexpected and severe slowdown that worsened throughout the year. The market is expected to continue its downward trend during the first half of 2025, with cautiously optimistic expectations appearing in the second half of the year. Key factors affecting the outlook include stronger government stimulus policies and the impact of the new US administration taking office in January.