Rising incomes to make China world’s largest luxury goods market

China is estimated to become the world’s largest luxury goods market over the next decade, boosted by rising incomes and a transition from saving to spending culture, said a report on Wednesday.

The demand for luxury goods and travel in Greater China is forecast to occupy 44 percent of the global sales, up from 15 percent currently, said a report from CLSA Asia-Pacific Markets.

“As incomes rise, China’s burgeoning middle class is adopting previously unattainable high-end lifestyles and is transitioning from a saving to spending culture,” said the report titled ‘Dipped in Gold: Luxury lifestyles in China and Hong Kong’.

One of the reasons for the projected rapid growth is that Chinese millionaires are 15 years younger than their overseas peers, and 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, the group said.

“Younger and richer than their counterparts’ overseas, Chinese consumers enjoy displaying their wealth and success and are not just spending on themselves but also purchasing gifts for friends and family,” CLSA said.

Louis Vuitton’s biggest customers are already Chinese buyers, while Greater China represents 28 percent of sales for Swatch, 22 percent for Richemont, 18 percent for Gucci, 14 percent for Bulgari and 11 percent for Hermes.

Luxury goods companies are expanding rapidly in China to accommodate demand that will account for half of their forecasted global growth in the next 10 years, it said. Sales of Handbags, leather goods, watches and jewellery are expected to see the fastest growth.