Entering The Chinese Market: Strategy and Opportunities

China’s luxury market has grown steadily at high rates over the past few decades. With such growth, many experts predict that China will become the world’s largest luxury market by 2025. Without a doubt, the COVID-19 pandemic caused some shifts within the Chinese luxury market. However, despite these drawbacks, the market has almost recovered. 


Pandemic and Luxury in China


The COVID-19 pandemic slowed the growth of the luxury market in China. In fact, the luxury market might not reach what the 2019 levels were until 2022. However, not all luxury industries have seen such a decline. By 2021, Xinergy Global predicts a 10% to 19% increase in the luxury market.


It should be noted that in 2021, the year when the pandemic caused the decrease in global luxury spending, China’s domestic market still managed an increase. Since the country’s wealthier class could not travel abroad due to COVID-19, they spent their money on luxurious clothing, leather products, fine wine, etc.


Generally, luxury markets in the Western world have been powered by international travel, largely by Chinese tourists. As aforementioned, that trend stopped due to the pandemic. As such, the wealthy Chinese consumers will spend their incomes and savings in their local market for the next coming years.


Trends and Tips For Luxury Businesses


  • An increase in China’s online spending is a significant trend that must be used efficiently. 

Any business trying to achieve success in the Chinese market must acknowledge that Chinese consumers have adapted to digital payments very rapidly. With the recurrent restrictions and lockdowns, all businesses must go digital. Companies can expect that e-commerce will be the most effective channel for luxury spending globally by 2025.


  • Companies should use social media and other digital platforms to increase their brand visibility and establishment in the local markets.


Many digital trends in China can be used efficiently, such as Wanghong. Celebrity marketing has been effective for many luxury brands to establish their presence in the high-spending, Chinese consumer market. Wanghong is just another way to advertise and reach new customers online.


  • Go for the long-term plan

Many international companies tend to go for short-term profits in the Chinese luxury market. Your business should be based on building a relationship, not short-term focused and transactional. However, it is no easy task to establish a long-term luxury business in China.


Long-term planning also offers excellent opportunities for Chinese exporters to sell their products and services to the country’s ever-expanding market. China’s state-of-the-art infrastructure and massive labor force are also attractive sources for supplying goods and services to the global market.


According to Niv Schwartz, there is a high likelihood that the global travel conditions will not return to normal before 2022 or 2023, and many luxury brands will see positive domestic growth in the next year to about a 30% rate. Brands will have to convince Chinese luxury consumers that domestic shopping is a better choice.




If you plan to open a luxury business in China, now might be the best time. It is no mystery that Chinese people love to spend their income on quality products and respect brand-name items. For decades, Chinese consumer spending has been increasing, and with no international flights, they are spending locally. Regardless of the potential for short-term changes, China’s luxury goods market momentum is poised to continue. Feel free to contact Xinergy Global for more information regarding strategic planning to enter the Chinese luxury market.

Notify of
Inline Feedbacks
View all comments

Learn how you can expand globally