CHINA will cement its status as the sweet spot for luxury goods companies in 2018, with younger Chinese shoppers in particular set to power industry growth, a study showed.

After increasing 6 percent in 2017, global sales of personal luxury goods such as shoes, handbags and clothing should rise by 6 to 8 percent at constant currency rates this year, according to the report by consultancy Bain.

That would put the market at between 276 billion euros (US$321 billion) and 281 billion euros.

Chinese consumers drawn to branded goods and becoming increasingly discerning about designers are underpinning much of that growth, already accounting for just under a third of spending on luxury goods worldwide.

Sales on the Chinese mainland could grow by 20 to 22 percent this year, far outpacing other markets like Europe where growth rates may not exceed 4 percent and where a strong euro is putting off tourists from spending in high-end stores, Bain said.

“The Chinese consumers are buying more in China, but they have not stopped buying,” said Federica Levato, a partner at Bain and co-author of the report, adding in relation to the global outlook: “We are very positive about both 2018 growth overall and also for the years to come.”

An expanding middle class in China as well as younger shoppers are behind the pickup.

Online sales — a small but fast-growing part of the luxury world estimated to have made up around 8 percent of business globally last year — are also particularly buoyant in China.

Millennials, or consumers aged between 20 and 35, may not be the wealthiest targets for luxury brands, but many young Chinese are often unafraid to spend their earnings on premium goods, sometimes bankrolled by parents or grandparents.

“There is a new generation coming, young Chinese are very willing to spend their money in fashion and luxury goods,” Levato added.

The backdrop in some other regions was also improving, Bain said. In the United States, a weaker U.S. dollar is making purchases more attractive for foreigners, and tourist spending is on the up in cities like New York and Miami.

However, Bain’s Levato said that while growth in the luxury goods industry worldwide was healthy — fueled by volumes rather than price increases — some firms were benefiting more than others.(SD-Agencies)