China's luxury fashion and beauty on the road to post-pandemic growth

Chinese luxury fashion and beauty sales are expected to surpass pre-pandemic levels, reaching 131 billion dollars by 2027, according to a report by BoF Insights, a think-tank at the Business of Fashion (BoF).

Two-thirds of luxury purchases will occur in mainland China by 2027, with Chinese shoppers budgeting at least 1,000 dollars for luxury fashion and beauty on upcoming international trips. Repatriation of spending has boosted sales, with 89 billion dollars expected to take place in mainland China.

Physical retail remains a key driver, accounting for 86 percent of purchases. Chinese consumers are embracing local brands and traditional fashion. Price differences drive appetite for foreign travel, with France being particularly attractive. Domestic travel, led by Hainan Island, is also popular.

Global luxury players must strike a balance between digital platforms and in-store experience, highlighting the need for updated China strategies and deeper customer relationships.

Diana Lee, Director of Research and Analysis, The Business of Fashion said: “The pandemic had a longer lasting effect on China than perhaps any other part of the world. Our analysis forecasts that global luxury fashion sales made by Chinese customers will surpass pre-pandemic levels in a few years but there is a much greater emphasis on domestic travel and shopping within China. Luxury players must update their China strategies and develop deeper customer relationships both at home and abroad.”