Luxury brands have also found the Chinese market to be one of their bestselling markets. However, times are changing. Due to the economy in China, it seems that more and more Chinese consumers are a bit hesitant to purchase luxury goods. In fact, two of the biggest luxury brands seen around the globe, Louis Vuitton and Burberry, are seeing huge drops in their sales within China.
Luxury Brands by the Numbers
LVMH, which has more than 70 luxury brands under it, including Louis Vuitton, Fendi, Celine and Bulagari confirmed that the luxury goods were not selling as well in China. According to the chief financial officer, Jean-Jacques Guiony:
“The Chinese stock market collapse has taken its toll and we expect this to have an impact only for a few months. We are seeing more Chinese tourists but they are spending a little bit less that is…the growth rate is not as high as it was in the first half.”
On Tuesday alone of last week, LVMH saw their shares decrease by over 3 percent. The slowing economy is the main reason behind this change in luxury brands being sold in China. Chinese consumers are unsure of where the economy is heading, thus they are buckling down on spending now, in the event that the stock market and economy do not bounce back.
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Luxury Brands on the Global Level
Though these luxury brands are found throughout the globe, the Chinese economy is definitely have lasting effects. Even with their sales in the United States and other markets, the companies have stated that they cannot make up for the loss that they are taking in China. China is the major market for most of these brands, as they sell more products in China than anywhere else in the world. However, there is still hope for these luxury brands, as Singles Day is coming up. And this is a major shopping day online, where many of these brands are available. In addition, the Singles Day mindset of shopping has also taken a hold of many brick and mortar retailers who offer amazing deals during this time.
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The Chief Executive of LVMH, Cristopher Bailey stated:
“While mindful of this external volatility, our plans for the festive season position us well to return to a more positive sales trend in the all-important second half.”
This is the lowest growth that markets in China have reported since 2009, which has many worried about what will become of the Chinese market for luxury brands. However, these luxury brands have weathered worse storms in other economies, and will survive this small storm and rise to the occasion in the Chinese economy.