According to McKinsey & Company’s new report titled “How young Chinese consumers are reshaping global luxury”, China will account for about 40% of the total global expenditures on luxury goods and will determine 65% of the latter’s growth. In money terms, Chinese consumers (at home and while abroad), will spend about 180 billion USD in high-end goods before 2025 is over, compared to the 115 billion spent in 2018.
McKinsey, regardless of the global economic uncertainty, trusts in the fact that Beijing will continue to have a key role in the global luxury marketplace in the future. The families of the mid-high class in china are represent the spine of the country, as 350 million people in China will earn between 2,600 USD and 3,900 USD per month per household before 2025. “We see strong brands getting stronger and weak ones getting weaker”, stated Daniel Zipser, Senior Partner at McKinsey and one of the authors of the report to local news source Jing Daily. “But I do feel there is an opportunity for brands that aren’t so big and strong as well. The reason is that Chinese consumers within the luxury industry are very different, and young generations believe brand names are relevant, yet not as much as they were for older generations”. Strengthening this very concept, which is very important for Italian brands, is the fact that younger Chinese consumers are becoming more informed, they appreciate craftsmanship and evaluate design, material and production process. Of course, the correct strategies need to be used. To reiterate the importance of the concept, McKinsey cites Chanel, a brand that, in China, promoted its Gabrielle bag by hiring actress Yang Mi and by collaborating with Mr.Bags to share “its message” with a specific target.
