What: China’s luxury retail is off to an excellent start this year as the main luxury conglomerate saw success in the country in their first quarter results.

Why it is important: According to PwC, China’s luxury market will account for more than 25% of the global market and is set to reach USD 118.3 billion by 2025.

LVMH saw double digit growth its fashion and leather goods division in the Chinese market with business in mainland China remaining a key focus for the brand.

Hermès sees momentum in China with sales in Asia increasing by 23% in the first quarter.

At Brunello Cucinelli, revenues in Asia grew 56% in Q1, with expectations of a positive year ahead in the Chinese market as the country represented 12% of sales in 2022.

Kering is holding several events in China to boost its presence and Cartier has also been hosting major exhibitions to educate the audience while also selling big ticket items.

According to Bain & Co., China is estimated to return to 2021 sales levels between the first and second half of 2023.

As China aims to keep spending within the country, Hainan, a duty-free island, is growing in importance with major luxury players already setting up their retail presence through wholesale channels.

High-net-worth individuals are ready to engage with new categories such as fashion jewelry and homeware as they look towards revenge spending post-pandemic.

Brands are focusing on clienteling to attract customers, including exclusive events and trunk shows to make clients feel appreciated and unique. Pop-ups have also been successful in testing new locations, and childrenswear is becoming the category with the fastest growth in the market.

Will 2023 be another ‘Golden Year’ for luxury retail in China?