China’s luxury market contracts by 10% in 2022

This is the first time the market shrunk in the last five years. 

Personal luxury market sales in China contracted by 10% year-on-year in 2022 for the first time in five years, Bain & Company reported. 

The report linked this to COVID-related lockdowns in the second quarter of the year that limited purchasing. 

This is on top of the decline in the real estate market, higher unemployment, and anxiety over COVID that affected consumer sentiment.

Read more: What could make shoppers switch to another luxury brand

“While most brands saw declines in 2022, a few stayed flat or grew despite challenging conditions. Three factors contributed to their success – first, bigger brands out-performed smaller players on average; second, brands with iconic portfolios did better than those with trendy or seasonal merchandise and finally, brands with a higher concentration of Very Important Clients (VICs) fared better,” Bruno Lannes, a Shanghai-based senior partner at Bain & Company, said.

Despite this, Bain & Company expects a more positive condition to return in the first quarter of the year.