What: PricewaterhouseCoopers (PwC) forecasts that China's luxury market will recover by 2025, driven by new consumer segments, offline channel expansion, and the growth potential of regions like Hainan.

Why it is important: The anticipated recovery of China's luxury market underscores the country's pivotal role in the global luxury industry. Understanding these dynamics is crucial for luxury brands aiming to capitalize on emerging opportunities and adapt to evolving consumer preferences.

PwC's report predicts that China's personal luxury goods market will regain momentum by 2025, following a downturn due to the pandemic. This recovery is expected to be fueled by the emergence of new consumer demographics, expansion of offline retail channels, and the high growth potential of regions like Hainan. The report suggests that China could surpass the United States as the world's largest luxury market, potentially reaching a market size of USD 148 billion by 2030. However, luxury brands must focus on delivering high-quality, personalized experiences to attract and retain very important customers (VICs) and ultra-high net-worth individuals (UHNWIs). Additionally, sustainability is highlighted as a growing concern, with Chinese consumers willing to pay a premium for environmentally-friendly products. The report also identifies Southeast Asia as an emerging luxury market, driven by increasing wealth and luxury tourism.

PwC predicts recovery in China's luxury market