Luxury brands lure Chinese shoppers despite slowdown

5 months ago 6

Louis Vuitton described its 'Voyager' amusement successful Shanghai past period arsenic the 'next section successful a strong, longstanding relationship' with China

Sipping champagne and nibbling fried dumplings, Shanghai's affluent and influential posed by Louis Vuitton signs astatine a runway afterparty –- a lavish matter designed to triumph customers successful China's important market.

China is the world's biggest spender successful the luxury sector, accounting for fractional of planetary sales. But arsenic its post-pandemic betterment falters, depletion has flagged, sending jitters done the industry.

For years, affluent Chinese tourists had travelled to Europe to store astatine its boutiques, but erstwhile the Covid-19 pandemic struck, the state introduced draconian restrictions that stopped them from leaving the country.

The measures besides threw the world's 2nd largest system into a slowdown that it is struggling to retrieve from, with user assurance deed and attitudes towards high-end purchases starting to shift.

Now, arsenic China emerges from its coronavirus haze, luxury brands are trying to woo its shoppers back.

Shares successful Gucci proprietor Kering tumbled successful April aft it reported income successful the archetypal 4th had fallen by 11 percent, citing pugnacious marketplace conditions successful China.

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"Gucci will... not beryllium unsocial present arsenic different brands person besides been feeling the pinch from China's home spending," Fflur Roberts, caput of luxury astatine Euromonitor International, told AFP.

Brands with a beardown beingness successful China similar Louis Vuitton are staging peculiar events and handing retired perks to VICs –- an acronym for Very Important Clients.

Louis Vuitton described its "Voyager" amusement successful Shanghai past period arsenic the "next section successful a strong, longstanding relationship" with China.

Its starring pieces –- boldly coloured dresses marked with ample cartoon-like animals -– were a collaboration with modern Chinese creator Sun Yitian, with the marque hailing "the tremendous stylistic vitality" of the country's youth.

Hollywood A-listers Cate Blanchett and Jennifer Connelly strode down the runway to their seats earlier the amusement began, arsenic did Chinese megastars and marque ambassadors Liu Yifei and Jackson Wang.

At the afterparty, influencers and VICs, galore dressed head-to-toe successful Louis Vuitton, mingled nether flashing neon thoroughfare signs, sampling fancified Chinese thoroughfare nutrient from stalls bedecked with the brand's logo.

'More cautious consumers'

Louis Vuitton's genitor institution LVMH is among the manner houses truthful acold proving reasonably resilient successful the look of China's economical headwinds.

Consultancy steadfast Bain & Company forecasts single-digit maturation successful the Chinese luxury marketplace successful 2024 compared to 12 percent past year

While its archetypal 4th results showed its slowest complaint of maturation successful years, the marque said that income to home and overseas Chinese customers accrued by astir 10 percent.

Prada and Hermes's archetypal 4th results some bushed analysts' expectations, posting 18 and 17 percent rises successful sales, respectively.

Overall, however, the marketplace has slowed down, with consultancy steadfast Bain & Company forecasting single-digit maturation successful the Chinese luxury marketplace successful 2024 compared to 12 percent past year.

"The economical downturn is impacting Chinese luxury consumers' confidence," said Lisa Nan, analogous for Jing Daily, which reports connected the Chinese luxury sector.

"We are facing overmuch much cautious and value-driven consumers, that besides cheque the handbag's second-hand marketplace worth earlier making a purchase."

Travel, not bags

Post-pandemic, determination has besides been a displacement successful user tastes and priorities.

Near Shanghai's Wukang Mansion, a landmark regularly swarmed by influencers, a pistillate surnamed Liu said that portion she occasionally bought decorator items, she would ne'er spell enactment up for a bag.

"I similar travelling a spot more," she said. "I'm not truthful brainsick astir marque names."

That's a inclination evident successful a study connected precocious net-worth individuals' preferences compiled by probe steadfast Hurun.

"There is simply a important displacement towards experiential luxury alternatively than luxury goods," said Nan of Jing Daily.

During the pandemic, the lack of high-spending Chinese tourists deed Europe's luxury goods assemblage hard.

Louis Vuitton's genitor institution LVMH is among the manner houses truthful acold proving reasonably resilient successful the look of China's economical headwinds

Some of that spending transferred to China, arsenic planetary brands focused connected organising events and creating goods much tailored to their biggest market.

Euromonitor International's Roberts said the outlook for the luxury marketplace remained "challenging", and that brands should "err connected the broadside of caution".

"That said, China is inactive location to implicit 2.5 cardinal radical with a nett wealthiness implicit $1 million," she added.

On a sunny time successful cardinal Shanghai, passers-by clutched their decorator handbags arsenic they went shopping.

"Some radical accidental that if you bargain classical styles, they whitethorn admit successful worth and it can beryllium an investment," said a 28-year-old media idiosyncratic named Winnie carrying a Dior bag.

"But for me... it's not an investment. As agelong arsenic I similar it, it's fine."

"I deliberation China is inactive successful a play wherever (European) brands are important," Jennifer Sheng, a pistillate successful her 60s, told AFP.

In her eyes, the allure of owning decorator products remained strong.

"Twenty years, 30 years ago, we didn't person anything," Sheng said.

"We privation to person these things."

Source: AFP

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