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Louis Vuitton described its ‘Voyager’ show in Shanghai last month as the ‘next chapter in a strong, longstanding relationship’ with China – Copyright AFP Hector RETAMAL<\/small><\/em><\/p>\nRebecca BAILEY<\/em><\/p>\nSipping champagne and nibbling fried dumplings, Shanghai\u2019s rich and influential posed by Louis Vuitton signs at a runway afterparty \u2013- a lavish affair designed to win customers in China\u2019s crucial market.<\/p>\n
China is the world\u2019s biggest spender in the luxury sector, accounting for half of global sales. But as its post-pandemic recovery falters, consumption has flagged, sending jitters through the industry.<\/p>\n
For years, wealthy Chinese tourists had travelled to Europe to shop at its boutiques, but when the Covid-19 pandemic struck, the country introduced draconian restrictions that stopped them from leaving the country.<\/p>\n
The measures also threw the world\u2019s second largest economy into a slowdown that it is struggling to recover from, with consumer confidence hit and attitudes towards high-end purchases starting to shift.<\/p>\n
Now, as China emerges from its coronavirus haze, luxury brands are trying to woo its shoppers back.<\/p>\n
Shares in Gucci owner Kering tumbled in April after it reported sales in the first quarter had fallen by 11 percent, citing tough market conditions in China.<\/p>\n
\u201cGucci will\u2026 not be alone here as other brands have also been feeling the pinch from China\u2019s domestic spending,\u201d Fflur Roberts, head of luxury at Euromonitor International, told AFP.<\/p>\n
Brands with a strong presence in China like Louis Vuitton are staging special events and handing out perks to VICs \u2013- an acronym for Very Important Clients.<\/p>\n
Louis Vuitton described its \u201cVoyager\u201d show in Shanghai last month as the \u201cnext chapter in a strong, longstanding relationship\u201d with China.<\/p>\n
Its leading pieces \u2013- boldly coloured dresses marked with large cartoon-like animals -\u2013 were a collaboration with contemporary Chinese artist Sun Yitian, with the brand hailing \u201cthe tremendous stylistic vitality\u201d of the country\u2019s youth.<\/p>\n
Hollywood A-listers Cate Blanchett and Jennifer Connelly strode down the runway to their seats before the show began, as did Chinese megastars and brand ambassadors Liu Yifei and Jackson Wang.<\/p>\n
At the afterparty, influencers and VICs, many dressed head-to-toe in Louis Vuitton, mingled under flashing neon street signs, sampling fancified Chinese street food from stalls bedecked with the brand\u2019s logo.<\/p>\n
\u2013\u00a0\u2018More cautious consumers\u2019 \u2013<\/p>\n
Louis Vuitton\u2019s parent company LVMH is among the fashion houses so far proving fairly resilient in the face of China\u2019s economic headwinds.<\/p>\n
While its first quarter results showed its slowest rate of growth in years, the brand said that sales to domestic and overseas Chinese customers increased by about 10 percent.<\/p>\n
Prada and Hermes\u2019s first quarter results both beat analysts\u2019 expectations, posting 18 and 17 percent rises in sales, respectively.<\/p>\n
Overall, however, the market has slowed down, with consultancy firm Bain & Company forecasting single-digit growth in the Chinese luxury market in 2024 compared to 12 percent last year.<\/p>\n
\u201cThe economic downturn is impacting Chinese luxury consumers\u2019 confidence,\u201d said Lisa Nan, correspondent for Jing Daily, which reports on the Chinese luxury sector.<\/p>\n
\u201cWe are facing much more cautious and value-driven consumers, that also check the handbag\u2019s second-hand market value before making a purchase.\u201d<\/p>\n
\u2013\u00a0Travel, not bags \u2013<\/p>\n
Post-pandemic, there has also been a shift in consumer tastes and priorities.<\/p>\n
Near Shanghai\u2019s Wukang Mansion, a landmark regularly swarmed by influencers, a woman surnamed Liu said that while she occasionally bought designer items, she would never go line up for a bag.<\/p>\n
\u201cI like travelling a bit more,\u201d she said. \u201cI\u2019m not so crazy about brand names.\u201d<\/p>\n
That\u2019s a trend evident in a report on high net-worth individuals\u2019 preferences compiled by research firm Hurun. \u00a0<\/p>\n
\u201cThere is a significant shift towards experiential luxury rather than luxury goods,\u201d said Nan of Jing Daily.<\/p>\n
During the pandemic, the absence of high-spending Chinese tourists hit Europe\u2019s luxury goods sector hard.<\/p>\n
Some of that spending transferred to China, as global brands focused on organising events and creating goods more tailored to their biggest market.<\/p>\n
Euromonitor International\u2019s Roberts said the outlook for the luxury market remained \u201cchallenging\u201d, and that brands should \u201cerr on the side of caution\u201d.<\/p>\n
\u201cThat said, China is still home to over 2.5 million people with a net wealth over $1 million,\u201d she added.<\/p>\n
On a sunny day in central Shanghai, passers-by clutched their designer handbags as they went shopping.<\/p>\n
\u201cSome people say that if you buy classic styles, they may appreciate in value and it can be an investment,\u201d said a 28-year-old media worker named Winnie carrying a Dior bag.<\/p>\n
\u201cBut for me\u2026 it\u2019s not an investment. As long as I like it, it\u2019s fine.\u201d<\/p>\n
\u201cI think China is still in a period where (European) brands are important,\u201d Jennifer Sheng, a woman in her 60s, told AFP.<\/p>\n
In her eyes, the allure of owning designer products remained strong.<\/p>\n
\u201cTwenty years, thirty years ago, we didn\u2019t have anything,\u201d Sheng said.\u00a0<\/p>\n
\u201cWe want to have these things.\u201d<\/p>\n<\/p><\/div>\n
Luxury brands lure Chinese shoppers despite slowdown
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#Luxury #brands #lure #Chinese #shoppers #slowdown<\/p>\n","protected":false},"excerpt":{"rendered":"
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