SINGAPORE – China is set to become the world’s second-biggest market for luxury goods after the United States in five years, overtaking France, Britain, Italy and Japan, an industry report said Tuesday.
Developed countries still dominate the personal luxury market but economic woes are reducing demand while rising middle classes in emerging economies take up the slack, consumer research group Euromonitor said. Luxury goods sales could top $302 billion worldwide this year, up 4.0 percent from 2011, as buyers from developing nations snap up designer handbags, clothes, jewelry, watches, fine wine, Champagne and spirits, it said.
“Benefiting from a fast-growing middle class and a fast-developing luxury distribution network, sales of luxury goods in China have consistently outperformed the global market,” Euromonitor said.
Japan is currently the world’s second-biggest market for luxury goods, but its share has been shrinking as the country struggles with economic problems.
Demand for luxury goods has been lackluster this year in developed Western markets and Japan due to rising prices and mounting insecurity over jobs and pensions, Euromonitor said.
However, emerging markets led by Brazil, Russia, India and China are making up for the shortfall, with the four accounting for 11 percent of total luxury sales this year, up from only 4.0 percent in 2007, it said.