China Becomes the World's Third Largest Consumer of Luxury Goods
12/09/05 -- Goldman Sachs released a report yesterday on China's luxury goods market. It stated that excluding private aircraft and yachts, China's purchase of luxury goods reached 6 billion USD, bringing its share in the global luxury goods market to 12%, but only about 2% of this amount comes from domestic purchases, with Chinese tourists' purchases abroad comprising about 10%. Goldman Sachs predicts that by 2015, China will be first in world consumption of luxury goods.
According to the Economic Reference Journal, the report said that China had already become third in world consumption of luxury goods, contributing to 20% of world consumption. In the next four years, China's demand for luxury goods will reach an annual compound growth rate of 25% and in 2008 will have a 19% market share, in 2015 29%, surpassing Japan. At that time, China's luxury good consumption will be equivilant with that of Japan. At present, Japan makes up 41% of total luxury goods sales and is number one in the world.
Statistics from Goldman Sachs show that in 2003, about 45 million Chinese consumers' purchasing power passed the 30,000USD mark. Purchasers of luxury goods are mostly between 20 and 30 years of age and the number of consumers in this age group is 11 times that of Japan.
Jacques-Franck Dossin, the Managing Director of Goldman Sachs International Securities Research Deparment believes that the growth in Chinese tourists will promote the growth of the luxury item market, because Chinese enjoy spending while they travel and while abroad, their brand recognition will increase.
From the beginning of this year, the amount of money Chinese tourists are allowed to take while travelling ...