About 1 / 2 of Chinese consumers say they’re likely to spend more on luxury purchases this holiday season within a recent survey as concerns mount the slowing and trade war-battered economy may dent demand inside the key sell for premium goods.
Weeks after Apple stated that lower-than-expected Chinese demand is hurting earnings, a whole new survey of merely one 385 affluent consumers by research firm CSG and page rank agency Ruder Finn established that 46% of respondents in China and 32% in Hong Kong said they planned to spend much more on luxury purchases this current year as compared to 2018.
While the results for China is in line with survey findings from a couple a long time ago, CSG’s Executive Director Simon Tye said the excitement showed a softening. “Over of late, we got Chinese confidence increasing and assend,” he explained. “For once in a very very long time, we are not seeing major growth sentiment in China.”
The global luxury industry is becoming increasingly dependent on China’s wealthy to push growth as well as a perceived pullback in spending has become a consistent drag on luxury shares recently. Laptop computer results signal relief for a time for makers of premium goods depending upon China, which is liable for a third in the $1 trillion luxury market worldwide.
Earlier this month, Apple cut its quarterly revenue outlook, blaming slower-than-expected increase China, setting off declines within the shares of luxury stocks from LVMH Moet Hennessy Louis Vuitton to Burberry.
Richemont, the company of Cartier necklaces and Piaget watches, had signaled in November that Chinese sales growth had slowed and trade disputes could dent it further. Its third quarter results last week, however, allayed some of the concerns.
“Affluent customers are still optimistic, nonetheless the energy may be bit duller this holiday season,” Tye said.
The average Chinese shopper inside survey, conducted between November 30 and December 11, spent above $35 000 on luxury goods not too long ago, in accordance with the report released Monday. In 2016, if your survey’s effects were last announced publicly, 42% of Chinese shoppers said they can spend more on premium goods.
Rethink strategies
A sliding yuan and tightened government supervision of overseas purchases is additionally forcing luxury brands to rethink their strategies after many years of counting on Chinese tourists on a break in Paris to Dubai to prop up sales. Companies, from jeweler Tiffany & Co. to bespoke menswear brand Ermenegildo Zegna, are shifting to increase domestic sales in China.
Brands can also be discovering how to feature Chinese elements to achieve attention locally: Burberry recently launched a Chinese New Year capsule collection and contains a smallish edition line sold only over Wechat, as an example.
The demand of taking note of local sensibilities was brought home after Dolce & Gabbana faced a boycott last November for any marketing plan and incendiary comments by co-founder Stefano Gabbana which were criticized by a few Chinese consumers as racist. D&G products are still blocked on Chinese e-commerce platforms, 2 months after an apology through the designers.
? 2019 Bloomberg L.P
