Despite economic uncertainty, the Chinese luxury goods market maintained a steady recovery and growth in the second quarter of this year.

According to Burberry's preliminary performance data for the first quarter, it was mainly driven by strong growth of 46% in the Chinese market, and its sales increased by 18% year-on-year in the three months ended July 1. The data shows that Chinese consumers still demonstrate strong purchasing power in luxury goods consumption.

According to Vogue Business and Barclays Research, 87% of luxury brands, including clothing, footwear, and jewelry, attracted more Chinese consumers in the second quarter compared to the first quarter. In terms of luxury consumption, 73% of respondents had actual expenses in the second quarter that exceeded their expectations at the end of the first quarter.

As growth continues, changes are also happening rapidly. After the global pandemic, a new economic reality has emerged, which also affects the consumption and commercial pattern of luxury goods in China. Even among the affluent population, their consumption is becoming more conservative. Luxury investment, especially in leather products, jewelry, and watches, is expected to surge as an alternative asset class. Young people and consumers from lower tier markets will make an increasing contribution to the growth of personal luxury consumption. Luxury brands need to seize business opportunities and further consolidate and occupy the market.

Consumers prefer hard luxury

According to Vogue Business and Barclays Research, the top ten luxury brands that Chinese consumers purchased the most in the second quarter were Chanel, Dior, Gucci, LV, Balenciaga, Hermes, Cartier, Tiffany, and Ralph Lauren.

DIOR TEARS Limited Time Boutique

According to the "China High Quality Consumption Report" jointly released by the Luxury Professional Committee of the China Federation of Commerce and the VIP Research Institute, in 2022, Chinese people absorbed nearly 1 trillion yuan of luxury goods consumption globally, with the domestic market accounting for 46% of the global luxury goods market. The Chinese market has become a battleground for many luxury goods giants. On July 12th, Dior held a 2023 autumn/winter ready to wear collection release show in Shenzhen, and then opened a DIOR TEARS limited time boutique in Shanghai; Chanel will also hold a release show in Shenzhen in November.

The survey results show that in the second quarter, jewelry and watches replaced handbags as the most commonly purchased luxury goods categories by consumers, while casual shoes, small leather goods, fashion shoes, and handbags ranked second to fifth, respectively. Compared to the previous quarter, the purchase volume of jewelry increased by 11%. In terms of purchasing intention in the third quarter, Van Cleef&Arpels and Rolex saw the largest increase. When hard luxury becomes the main force driving market growth. The increasing correlation between preservation, appreciation, and investment has an impact on consumer purchasing behavior.