In the International Finance Center (IFC) in Pudong, Shanghai, long queues are seen on Saturday in almost every luxury store including Louis Vuitton. Photo: Cao Siqi/GT

French luxury conglomerate LVMH is expected to set up its largest e-commerce sales and storage hub for cosmetics in the Asia-Pacific region in Shanghai, underscoring the confidence of the luxury brand in the Chinese market to achieve a rebound in revenue from the pandemic-hit business.

The hub will be located in the Xinzhuang Industrial Zone, Minhang District, Shanghai and is currently under construction, a company source told the Global Times on Saturday.

According to a new media outlet affiliated with Minhang District, the project covers an area 90,000 square meters, with an estimated investment of nearly 1 billion yuan ($154 million). Construction will take 18 months, and will operate by the end of 2022.

It will serve as the LVMH group's e-commerce packaging sorting and sales base, serve the group's high-end cosmetics and perfume business platform, and integrate the business network from e-business terminal, merchandise storage and sorting and packaging to the shipping and logistics system.

In 2020, the Asia market, excluding Japan, accounted for 45 percent of LVMH Group's perfumes and cosmetics sales, according to the company's annual report, making it the largest regional market for these categories. The China market for its quick economic rebound from the pandemic played a key role in the growth of brands owned by LVMH, according to the company's annual report.

The company said in its annual report that Parfums Christian Dior improved gradually in the second half of 2020, with a notable acceleration in the fourth quarter, especially in China. Its cosmetic brand Fresh has developed digital marketing campaigns and its online sales, particularly in China, the report said.

China's share of the world luxury goods market nearly doubled last year, growing from about 11 percent in 2019 to 20 percent in 2020, while the global luxury market declining at an expected rate of 23 percent in 2020, according to a report issued by global management consulting firm Bain & Company.

It is predicted that China is on track to become the biggest luxury market by 2025 and e-commerce as the biggest channel for luxury spending globally by 2025, according to the consulting firm.