Bain & Company recently released a luxury goods market report that shows China surpassing Japan as the second largest luxury goods consumption country, next to the US.

According to the study, China is the second largest market for Porsche, with 14,785 cars sold in a year, while sales of top cosmetics brand Estee Lauder went up by 30 per cent in 2010. Piaget, the luxury watch brand, saw sales grow by 16 times over the last four years. Louis Vuitton still remains the most coveted luxury brand in the country.

Sales of luxury items went up 12 per cent in the US last year, 6 per cent in Europe, 22 per cent in Asia, and a whopping 30 per cent in Mainland China. In a statement, Bain predicts that with China's continued development, its status as the fastest-growing country for luxury goods will keep on, along with an expected annual increase of 25 per cent.

"In the next three to five years, purchasers aged between 25 and 30 will be the main driving force of luxury goods market. Chinese buyers of luxury goods are basically for personal items, such as clothes, perfume, watches and leather products, while in Western countries, top luxuries are the likes of real estate, automobiles, and valuable jewelry," said Ouyang Kun, the chief representative of China's office in the World Luxury Association.