China’s luxury spending may more than double by 2015, surpassing Japan to become the world’s largest market for branded goods, according to McKinsey & Co.

Sales of luxury items in China, including clothes, handbags, watches and fine jewelry, are expected to increase to about 180 billion yuan in 2015.

The 2015 estimate would be equivalent to 20 per cent of global luxury spending, the consulting company said.

While the Western markets are faltering, luxury retailers are searching for the next location to sell their high-end goods, and it looks like India might just be the place.

While India makes up just 0.4 percent of global luxury good sales, the market is growing at 25 percent a year, according to a recent Bain & Co. study.

There are 1.5 million households in India who could afford luxury goods, compared with 1.6 million households in China, according to McKinsey.