Chinese consumers will make up at least 45% of luxury market spending by 2025, up from an estimated 32% this year, according to the 17th edition of Bain & Co’s annual luxury study. Personal luxury goods sales continued their revival last year, growing by 6% globally at constant exchange rates to reach €260 billion. The positive trend is expected to continue with an estimated annual growth of 3-5% per year through 2025 to reach a market size of €320-365 billion, according to the Bain report, which was published in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation.

Over the past three years, Chinese spending on luxury goods on the Chinese mainland was twice as much as overseas spending. On China’s mainland, luxury sales are estimated to grow 18% at current exchange rates to €23 billion this year, driven by a rising demand rather than by price increases. “Last year, we saw the global luxury market return to healthy growth, albeit at a more moderate pace than in the past,” said Claudia D’Arpizio, Bain Partner and the lead author of the study. “That trend continued in 2018, reinforcing the ‘new normal’ we predicted, led by flourishing luxury demand from Chinese consumers, the continued rise of online channels, and increasing influence from younger generations of consumers.”

The report says online channels are likely to contribute to up to 25% of the total market size, more than double from today’s 10%, thus cannibalizing more “traditional” channels. Online luxury shopping continues to accelerate in 2018, with an estimated 22% growth amounting to €27 billion. The U.S. market made up close to half of online sales at 44%, but Asia is emerging as the new growth engine for luxury goods online, the Shanghai Daily reports.