HONG KONG (Reuters) - Rising affluence after years of solid wealth creation, and a steady transition from a saving to a spending culture will see China become the world’s largest luxury goods market over the next decade, according to CLSA.
CLSA Asia-Pacific Markets, majority owned by France’s Credit Agricole SA, expects Greater China to account for as much as 44 percent of global luxury sales by 2020, up from 15 percent now.
One of the main reasons for the shift, according to CLSA, is that mainland Chinese millionaires are on average 15 years younger than their overseas peers. And three decades of double-digit GDP growth has created a lot of them.
CLSA estimates that the number of individuals with more than 1 billion yuan ($151.7 million) has increased at an annual rate of 50 percent from 24 in 2000 to 1,363 in 2010.
Capturing this vast market and tapping into expanding wallets is front and centre in terms for strategy for many the world’s best known luxury brands who are rapidly ramping up in China.
Louis Vuitton Malletier’s biggest customers were already Chinese buyers, while Greater China represented 18 percent of sales for Gucci, 14 percent for Bulgari and 11 percent for Hermes, said CLSA.
CLSA was ranked Asia’s top equity research and advisory firm for 2010 in its latest survey by consultancy Greenwich Associates.
(Reporting by Vikram S.Subhedar; Editing by Chris Lewis)