Half of the Global Luxury Purchased by the Chinese after the Covid-19?
【Posted on: 2020 May】
As the impact of COVID-19 continues, and the global luxury goods market has been hit hard. According to the latest report from Bain & Company, overall sales of the worldwide luxury goods market fell by 25% -30% in the first quarter. Still, they expect the luxury goods market to resume growth in 2021, driven by the Chinese market, digitalization, and Generation Y and Generation X consumers.
At the same time, according to Bloomberg News, in the past three weeks, Louis Vuitton’s store sales in mainland China have increased by about 50% over the same period last year. This may indicate that the Chinese luxury goods market has begun to rebound after sales plummeted in the first quarter. In the process of responding to this crisis, six major consumer trends are taking shape.
1. The importance of Chinese consumers in the market has increased. If the epidemic is curbed in China, then luxury consumption may be restarted first in China, and continued travel restrictions will mean that many purchases that used to be done abroad will take place in China.
2. Accelerate the transition to digital shopping. On the premise of maintaining safety, consumers will return to physical stores, but some of the digital shopping habits acquired during the outbreak will persist.
3. The improvement of environmental and social awareness. Consumers’ concerns about sustainable development and social issues will continue. Visionary brands may rethink the product life cycle, supply chain management, and inventory handling issues.
4. Rational mentality. As consumers prioritize brands with attitudes, ethics will become as important as aesthetics.
5. Strengthen pride in the local culture.
6. The enhancement of diverse needs. Because the consumption power of many middle-class consumers has declined, brands need to transform their products at accessible price points.
For now, while the U.S. and Europe need more time to recover, the Chinese are starting to spend again. The global nature of luxury will come back to the fore when things settle down. Brands can even emerge from the crisis stronger. The lessons learned in 2020 can fuel a long-term recovery in 2021 and beyond. The crisis may change the status of the luxury industry, but it could also be a shift for the better.
Feel free to talk to us
It’s a team with one single shared goal, which is our client’s success. Deliver results for your business now.
