China may surpass Japan to become the world’s biggest consumer of luxury goods by 2015, Commerce Minister Chen Deming said in Beijing today.
Domestic consumption of high-end consumer goods gained 23 percent last year, Chen said at a press conference.
The ranks of the wealthy in China, which last year surpassed Japan as the world’s second-biggest economy, are swelling as the nation experienced the fastest expansion of any major economy. That’s driving demand for products from companies including LVMH Moet Hennessy Louis Vuitton SA and Swatch Group AG, CLSA Asia-Pacific Markets said last month.
“The demand of China’s 1.3 billion people for luxury consumer goods is now second in the world, slightly lower than Japan,” Chen said. “By 2015, the expected consumption may exceed that of Japan to become the world’s biggest market for high-end consumer goods. This is mainly due to our large population.”
The consumption of luxury goods in Western countries was also depressed by the global financial crisis, Chen said.
Luxury goods companies expect half their global growth to come from China in the next decade and for greater China to account for 44 percent of global sales by 2020, up from 15 percent, according to CLSA. The greater China region typically refers to mainland China, Hong Kong and Taiwan.
Chinese consumers are the biggest buyers of Louis Vuitton products and represent 28 percent of sales for Swatch and 11 percent at Hermes International, according to CLSA.
China’s $5.88 trillion gross domestic product in 2010 exceeded Japan’s $5.47 trillion. The U.S. is the world’s biggest economy.
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