Luxury products such as Coach has become necessities of daily life of wealthy Chinese and their children.
BEIJING -Several months ago, Wei Yi dug deeply into her savings to buy a RMB 3,000-yuan (USD $441) leather bag by the US brand Coach as a wedding gift for her friend.
"It's necessary for young people to have a couple of luxury items," said Wei, 28, a student at University of International Business and Economics in Beijing.
"I picked the bag because it is a good brand and it matches various dressing styles."
Wei, who said she had used money saved from her parents and part-time jobs to buy the bag, is just one of about 20 million in China who are driving the country's booming luxury market that now ranks second in the world, after Japan, in terms of sales.
The Chinese magazine Sanlian Lifeweek said that in the next five years, the number of potential luxury customers in China could climb to 160 million.
And research released by China Investment Consulting Industry Research Center (CIC) showed that at the end of last year, total sales in China's luxury market hit $9.4 billion, 27.5 percent of the world's total.
Bain & Co, a management consulting firm, said sales of luxury goods in China grew by 12 percent last year. And within five years, it predicts China will be the world's top luxury market, with sales worth $14.6 billion.
One reason for the flourishing market is the rise of the Chinese nouve riche, the core customers for luxury products.
"To wealthy Chinese and their children, these expensive goods are necessities of their daily life," said Li Xuerong, CIC's chief analyst.
The 2010 Hurun Wealth Report shows there are 875,000 people worth more than 10 million yuan ($1.47 million) each in China, an increase of 6.1 percent from last year.
On average, each of them owns three cars and 4.4 luxury watches and spends 1.7 million yuan every year.
Another reason is that traditional luxury markets in Western countries have been sluggish due to an economic downturn.
"During the financial crisis, the luxury market in Europe and North America experienced a sharp decline of 20 percent to 30 percent," Li said.
"However, China, which was less influenced by financial tsunami, still recorded a growth in luxury goods consumption."
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