Generations also play a role in the shifting consumption, according to the Swiss firm.
“Young, female, increasingly fashion-conscious, free with spending and active on social media,” the report described the profile of a key cohort driving luxury spending in China.
“Driven by the ease of online shopping and financial support from parents, Chinese female millennials are buttressing the luxury market at home and abroad,” it said.
The report also said that the Julius Baer Lifestyle Index increased 2.91 percent from the year before in U.S. dollar terms, supported by what it described as an improving global economy and continued wealth generation. The index tracks spending on 22 luxury items, including cigars, ladies shoes, men’s suits, watches, Botox, wine, boarding schools, Lasik eye surgery, cars and business class tickets in 11 Asian cities.
Shanghai was the most expensive city for luxury spending in 2018, with Singapore coming in second and Hong Kong third. The latter fell from the top spot it held last year.
Bhaskar Laxminarayan, Julius Baer’s Asia chief investment officer and head of investment management, said that China’s slowing economy is unlikely to cause a slowdown in luxury spending.
The country still has relatively high growth rates above 6 percent, so there is plenty of room for discretionary spending, he said.
“The long term consumption trend hasn’t changed,” Laxminarayan said.