China is set to be the engine of global luxury spending, with young consumers powering the strong growth, according to a report released Friday by global consultancy McKinsey & Company.
China delivered more than half the global growth in luxury spending from 2012 to 2018 and is expected to deliver 65 percent of the world's additional spending by 2025, according to the 2019 McKinsey China Luxury Report.
Chinese consumers are forecast to almost double their current luxury spending to 1.2 trillion yuan (178 billion U.S. dollars) by 2025, accounting for 40 percent of the world's spending, the report said.
It noted that young Chinese consumers are reshaping global luxury.
China has 16.9 million luxury consumers born in the 1980s and 1990s. They make up 71 percent of the country's total luxury consumers and account for 79 percent of the total luxury spending in 2018, according to the report.
The majority of these young consumers are fresh to the market, presenting both a tantalizing opportunity and an implicit imperative for brands to stay current, the report said.
"Consequently, opportunity abounds as brands seek to engage the attention of consumers in the world's most lucrative and fastest-growing luxury market," it said.
