Business

China Accounts for 28% of Global Luxury Consumption
By wchung | 08 Jun, 2026

China is set to overtake Japan as the world’s biggest luxury-consuming nation after spending $12.6 billion on luxury goods in 2011, according to a study by Starcom Mediavest.

The three-month study by Starcom covered 43 first-tier to third-tier cities across China and are based on interviews with 1,002 luxury consumers aged 22 and 44 who earned more than 20,000 yuan ($3,160) per month and spent at least 10,000 yuan ($1,580) per year on luxury items.

The maturity and observation skills of consumers from China’s first-tier cities are nearly on par with those from developed markets like Japan, Hong Kong and Singapore, said Jeffrey Tan, Starcom’s national research and insights director. The majority of consumers from China’s second- and third-tier cities, on the other hand, remain relative “novices,” the study found.

Consumers in first-tier cities had shifted their focus from the desire to show off to their appreciation of the quality of the product itself or the brand’s history. Buyers from second- and third-tier cities remain stuck in the show-off phase, in which they equate higher price with better quality due to their lack of knowledge.

The media plays a significant role in affecting the purchasing decisions of Chinese consumers, the study found. Magazines, in particular, have become a key tool for consumers to learn about products and brands. Billboards near airports and celebrity endorsements were also found to be highly effective for consumers in second- and third-tier cities.

Internet purchases are also seen to be on the rise due to convenience and products available exclusively online.

China’s younger consumers dominate the luxury good market. In addition to high-powered female executives, social men and young parents were also found to have strong purchasing power.

The $12.6 billion spent by Chinese consumers on luxury goods in 2011 accounted for 28% of global consumption. China has passed the United States in luxury consumption and is on track to overtake Japan as the world’s leading consumer of luxury goods.