Asia’s luxury market undergoes reshuffling: report

Japan is expected to be the “rising star” in the region’s luxury market.

The Asian luxury market is experiencing a reshuffling following a record year in 2022 at around $376.4b (EUR345b) which continued in the first quarter of the year, posting a 9% to 11% growth from last year.

In a report, Bain & Company said Mainland China will grow this year but not all brands will return to 2021 levels.

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In the meantime, the Asian market is experiencing a reshuffling, with old and new luxury magnets.

Japan, with a market value reaching about $26.2b (EUR24b) in 2022, will be the “rising star” as local customers keep up spending. This will also be supported by inbound tourists looking for best-seller accessories and the first signs of Chinese arrivals.

Hong Kong and Macau saw a sharp acceleration as primary destinations for Chinese tourists backed by government policies. They saw a $5.45b (EUR5b) market value in 2022.

Southeast Asia recorded a $13.1b (EUR12b) luxury goods market in 2022 and continued a “brilliant growth path” on the back of the influx of Russian tourist spending, the arrival of Chinese consumers, and demand for jewellery and watches.

However, South Korea, which reached around $22.9 (EUR21b) market value last year, is slowing as a “rebalancing of locals spending on purchases abroad and travel retail accelerating” takes place due to inflows from Southeast Asia and limited Chinese arrivals.

Bain & Company said the growth during the first quarter could be traced to various factors such as the reopening of China, momentum in Japan and Southeast Asia, recovering of confidence of European consumers, and the gradual decline in hyperinflation.

The US, on the other hand, is expected to slow down as consumers remain cautious about a potential recession.

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