What: The Q2 luxury spending of Chinese consumers is higher than expected from Q1 surveys and the jewellery category has overtaken handbags as Chinese nationals choose to shop more conservatively by investing in luxury purchases rather than indulging.

Why it is important: Despite concerning economic situations such as job security and stringent zero-Covid policies, the upper class of China continues to drive the recovery of the Chinese luxury market.

Chinese consumers are making a comeback in the luxury fashion market with reports showing that two-thirds spend over RMB 15,000 on luxury fashion products in Q2 2023. Wealthier millennial and Gen Z women above 25 years old are the main high-end consumers.

Chanel and Dior were the most purchased luxury brands, followed by Gucci, with 87% of brands seeing an increase in the number of consumers purchasing luxury brands during this period. The jewellery sector is more appealing to consumers now due to the retainment of value as compared to leather goods; the high price point is accessible to the very wealthy who are the top consumers of luxury. Van Cleef & Arpels and Rolex are forecasted to see the greatest percentage gains in Chinese consumer sales in Q3.

Chinese tourism is set to rise in the second half of 2023 which in turn will amp up international spending, particularly in the UK and EU where there is price favourability.  Luxury brands have strategised to set up salons and boutiques to also appeal to the ultra-high net worth clientele.

Q2 sees the Chinese luxury market perform beyond Q1 expectations