From Gemma A. Williams | October 2021
While less pressure on natural resources and the environment means a shrinking population may have its benefits, its full impact on luxury remains to be seen. China accounts for 35 percent of global spending and is on track to become the biggest global luxury market by 2025. The sector is unlikely to feel any hit in the immediate short term, but with fewer people to sell to and a growing army of sophisticated local names on the horizon, many brands’ days are surely numbered.
What Happened: According to new research, previously estimated rates of China’s demographic decline might have been severely miscalculated. In fact, the country’s population could halve within the next 45 years, warns a new study from Xian Jiaotong University. This number was based on the official birth rate of 1.3 children per woman last year (well below the figure that would safeguard the population of two per woman). China’s current population is over 1.4 billion, and the 2019 United Nations projection that the country would still have around 1.3 billion people by 2065 now looks to be incorrect. (…)