- Luxury goods demand in China is decreasing.
- The economy is slowing, leading shoppers to reconsider luxury buys.
- Shifts in consumer preferences and shopping habits also contribute to this change.
China has long been a strong market for luxury brands, especially following the pandemic when many affluent consumers had extra cash to spend.
However, luxury shopping is declining due to factors like a property crisis, geopolitical issues, and high youth unemployment.
While the government is trying to boost the economy with stimulus packages, it’s uncertain if these will restore consumer confidence.
LVMH recently reported a 16% drop in Q3 sales in Asia (excluding Japan) compared to the same quarter last year. This region used to account for 35% of its revenue three years ago, but it’s now down to 29%.
Other brands like Kering, Hugo Boss, and Burberry have also reported weak sales in China, raising questions about whether the decline is solely due to the economy or deeper changes in consumer behavior.
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