China’s Luxury Market Set For Modest Growth In 2024

Frank Holmes
5 min readMar 6, 2024

According to the latest “China Luxury Report” by Bain & Company, China’s luxury market is poised for modest growth this year after a commendable 12% year-on-year increase in 2023. Looking ahead to the end of the decade, Bain estimates that Chinese consumers will represent between 35% and 40% of the global total.

This potential growth is underpinned by a surge in retail sales and tourism revenues, as well as an expanding consumer class. During the recent Lunar New Year holiday, tourism revenues surged 47.3% compared to the previous year, alongside record-breaking entertainment spending.

During the pandemic, over 90% of China’s luxury shopping occurred domestically as international borders were slammed shut. This figure is projected to fall to around 70% this year as more Chinese consumers are able to travel abroad, Bain says. Chinese luxury spending in Europe and Asia last year was 40% to 65% of 2019 levels, but this is also expected to improve.

109 Million New People Joining The Consumer Class

The global share of Asia in the personal luxury goods market has reached an impressive 38%, with China contributing the lion’s share, according to KPMG. This dominance is not only a testament to the country’s economic might but also its evolving consumer market, fueled by rising incomes and middle-class consumption. By 2030, the World Bank says, the Chinese middle class is expected to represent a staggering 70% of the country’s population, wielding considerable purchasing power and reshaping global luxury consumption patterns.

Moreover, the World Data Lab believes that 109 million people will enter the consumer class this year, despite economic slowdowns in Asia. India and China are at the forefront of this expansion, adding millions of new consumers and significantly influencing global luxury dynamics.

We are cautiously optimistic about the global personal luxury goods market, despite economic headwinds. Luxury revenues are projected to expand at a compound annual growth rate (CAGR) of 3.2% from 2023 to 2028, hitting over €311 billion by 2030. Factors such as rising disposable income, technological advancements and heightened brand awareness through social media and marketing strategies are poised to drive growth, appealing to a broader consumer base.

Gaining Access With USLUX

Investors seeking comprehensive exposure to the luxury goods industry don’t have many options. In the U.S., one of the only available luxury-focused funds is our Global Luxury Goods Fund (USLUX), which seeks to invest in companies that are involved in the design, manufacture and sale of products and services that are not considered to be essential but are highly desired.

Besides traditional luxury brands, USLUX also seeks to invest in consumer discretionary industries such as automobiles, home and office products, leisure products, recreation facilities, travel and more.

We’re very pleased with how well USLUX has performed in the past year. As you can see in the chart above, the fund was up 8.65% during the 12-month period through the end of January 2024, compared to a loss of 1.27% for the S&P Global Luxury Index.

Explore USLUX

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1–800-US-FUNDS (1–800–873–8637). Read it carefully before investing. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

Past performance does not guarantee future results.

Total Annualized Returns 12/31/2024:

Performance data quoted above is historical. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1–800-US-FUNDS.

Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

The S&P Global Luxury Index is comprised of 80 of the largest publicly-traded companies engaged in the production or distribution of luxury goods or the provision of luxury services that meet specific investibility requirements.

Mutual fund investing involved risk. Principal loss is possible. Stock markets can be volatile and share prices can fluctuate in response to sector-related and other risks as described in the fund prospectus. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Companies in the consumer discretionary sector are subject to risks associated with fluctuations in the performance of domestic and international economies, interest rate changes, increased competition and consumer confidence.

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Frank Holmes

Frank Holmes is the CEO and chief investment officer of U.S. Global Investors, an innovative investment manager with vast experience in global markets.