Fall for luxury in China, but three factors helped - footwearbiz: Lead

News

Fall for luxury in China, but three factors helped some brands fare better

13/02/2023
Fall for luxury in China, but three factors helped some brands fare better
Specialist consultancy Bain & Company has put a figure of around $5.1 billion on the value of duty-free sales in 2022 in the Chinese province of Hainan. The central government has worked for some time to build Hainan up as a shopping destination for luxury goods, but last year’s figure marked a decline of 30% year on year.

According to Bain, sales of luxury goods for the whole of China contracted by 10% in 2022. While it did not give a value, it said this was the first decline after five consecutive years of growth.

Within this, it reported that, while most brands saw declines in 2022, “a few stayed flat or grew despite challenging conditions”. Bain identified three factors that contributed to the relative success of these brands.

Bigger brands out-performed smaller players; brands with “iconic portfolios” did better than those with “trendy or seasonal merchandise”; and finally, brands with a higher concentration of wealthy customers who shop for luxury items several times a year (Bain refers to these as Very Important Clients, or VICs) also fared better.

Bain expects growth to resume in 2023 as China recovers from covid-19. It said: “The fundamentals of consumption in China are still intact. Compared to other emerging markets, China is a behemoth for luxury growth.”

Image: Gucci.

footwearbiz.com cannot be held responsible for content if the language setting is changed from English.

The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.