The global personal luxury goods sector will see growth of up to 6% this year, lifting the industry to a market value of around £240 billion, according to a new analysis by Bain & Company in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation.

The growth is partly the result of an increase in European tourism, which is picking up this year despite socio-political turmoil in countries like the United Kingdom and France. But much more so, the growth comes on the back of the growing spending of mainland Chinese consumers on luxury brands such as Gucci, Louis Vuitton, Prada and Versace. “China continues to dominate the luxury scene,” said Claudia D’Arpizio, a partner with Bain & Company in Italy.

Illustrating how important Chinese consumers are becoming for the global luxury market, D’Arpizio said, “By 2025, Chinese customers will account for 45%+ of the global market, with half of their luxury purchases happening in Mainland China.” By then, the industry is forecast to be worth between €320 billion and 365 billion, depending on the development of economic fundamentals.

For Asia as a whole, the researchers expect the regional luxury market to grow by 10%. An expanding middle class with increasing disposable income is fueling growth in Indonesia, Philippines and Vietnam, while sustained growth in South Korea is the result of local consumers and a mild rebound of tourism. Japan remains an attractive market for luxury brands in terms of sales volume, although growth is expected to remain slow, at 2% this year. However, tourist spending is expected to rise ahead of the Tokyo Olympics in 2020, which will pull the growth rate for 2020 closer to the 4% mark.