e-commerce and social media to connect with the Chinese luxury consumer demographic.  Interest-based e-commerce According to Fflur Roberts, head of luxury goods at Euromonitor, social media is playing a crucial role in the omnichannel transformation of the Chinese fashion industry, with a growing shift towards “interest-based e-commerce”.  “In contrast to search-oriented e-commerce based on keywords typed in, interest-based e-commerce uses AI to understand consumers’ habits and behaviour on social media platforms to orient their purchases,” she told Inside Retail. Some examples of how fashion players in China are adopting interest-based e-commerce include the use of virtual spokespeople, online fashion shows and digital membership systems, such as WeChat.  WeChat, which has amassed over 1.2 billion active users, and offers mini apps and official brand accounts, offers brands the widest reach. “Specific examples of luxury brands that have successfully leveraged social media during the Lunar New Year have come from brands like Miu Miu, Burberry, Gucci and of course Fendi’s Pokémon collaboration,” Roberts added. The luxury marketplace While Chinese consumers were largely unable to travel overseas during the pandemic, the domestic luxury market continued to grow. Roberts said that Chinese consumer spending on personal luxury goods had already surpassed pre-pandemic levels by the end of 2020 and has continued to grow year on year, reaching $59 billion by 2023.  “This growth trajectory is set to remain over the short to medium term, albeit at a slower pace, to reach $88 billion by 2028, spurred on by a number of local factors, including better shopping options, heightened customer service and of course repatriation of luxury spending,” she noted. Roberts also said that all other categories bar experiential luxury, namely luxury cars and luxury alcoholic drinks, also managed to surpass pre-pandemic levels by the end of 2020 due to these factors. She said the Asia Pacific region will continue to enjoy the rapid increase in disposable income levels that both male and female consumers have enjoyed in recent years.  “Indeed, among the key luxury goods and fashion countries with the fastest-growing wealthy and affluent populations over 2023-2030, it is worth noting that four out of the top five wealth-gain markets are in Asia Pacific,” she pointed out. Roberts went on to say that China is expected to be among the countries with the fastest growth in the number of Ultra High Net Worth Individuals (UHNWI), High Net Worth Individuals (HNWI) and affluent adults between 2023 and 2030. “China already has the second largest UHNWI and HNWI populations, but by 2025 China will move four places to have the second largest wealthy demographic overall, with 3.1 million adults having a net worth exceeding US$1 million,” she elaborated. Hong Kong and travel retail Roberts noted that Hong Kong reclaimed its position last year as the number one market in terms of per capita spend on luxury goods, and it is expected to recover to its pre-Covid-19 level of sales by mid-2024.  She went on to say that Hong Kong has long been recognised as one of the world’s leading luxury markets, and is home to a highly concentrated number of HNWIs.  “Its strategic location, strong economy, favourable tax policies and reputation as a shopping destination have attracted luxury brands and affluent shoppers from around the globe for many years,” she noted. Roberts believes Hong Kong is projected to sustain its leading position in per capita expenditure on luxury goods throughout the forecast period, as the country adapts to a new normal and experiences a steady influx of Chinese tourists from the mainland. International arrivals to Hong Kong were expected to reach 95 per cent of their 2019 levels last year, amounting to an impressive 1.2 billion trips, with spending of US$1.7 trillion.  The bigger picture Based on Euromonitor International’s Travel Forecast Model, the top outbound tourism spenders include Australia, the United Arab Emirates, Vietnam, New Zealand and China.  “What stands out is the sheer spending power coming from emerging markets such as China despite economic uncertainties and growing polarisation due to geopolitical tensions,” she opined. Roberts said that luxury and upscale hotels are forecast to be the first to recover after the pandemic, powered by revenge travel, especially amongst the world’s highest earners.  “By 2024, global luxury hotels are expected to reach $100 billion and fully recover to peak levels. Asia Pacific is now out of the blocks, after a slow return to travel following an overly cautious approach to reopening post-pandemic,” she said.  With a strong propensity to spend on experiential luxury, Roberts said that global luxury brands have been falling over themselves to penetrate Asia Pacific, especially China, over the past few decades led by the likes of IHG and Marriott. “The new Chinese luxury consumer is characterised by digital sophistication, a preference for experiential luxury, cultural awareness, and a growing emphasis on sustainability and ethical consumption,” she stressed. Ultimately, she believes that luxury brands, and those in the travel and hospitality sector who understand and adapt to these shifting consumer dynamics, are well-positioned to succeed in the dynamic and competitive luxury market.