China’s Luxury segment lost 10% in 2022
2023.02.07 09:24
China’s Luxury segment lost 10% in 2022
By Tiffany Smith
Budrigannews.com – According to a report released on Tuesday by Bain & Company, Beijing’s zero-COVID policy and a slowing economy impacted spending, which resulted in the luxury market in China shrinking by 10% in 2022, snapping a five-year growth streak.
Between 2019 and 2021, the luxury market grew by 42% annually; however, in 2022, its fortunes changed as a result of China’s redoubled effort to eradicate COVID-19 through city-wide lockdowns and a regulatory crackdown that affected the property industry and increased unemployment.
The figure contrasts with sales growth of 26% between 2016 and 2019, and growth of 1% between 2012 and 2016.
Bain stated that all luxury categories were affected to varying degrees throughout the year, mirroring recent outcomes for 2022 from companies such as the Italian Salvatore Ferragamo and the French luxury goods group LVMH.
The watch market saw the greatest decline, with sales falling by 20% to 25% from 2021, while categories with high online penetration, such as luxury beauty, experienced single-digit declines.
Sales of jewelry and leather goods decreased by 10% to 15%, while fashion and lifestyle sales fell by 15% to 20%.
Yet, Beijing’s choice to destroy the zero-Coronavirus strategy toward the beginning of December is probably going to bring back development this year as shopping center traffic improves and customer feeling bounce back, Bain said.
“We hope to see 2021 deals levels at some point between the first and last part of 2023,” said Weiwei Xing, a Hong Kong-based accomplice at Bain and Company.
She stated:
“While there is a lot of optimism, there are also risks. Before international travel resumes, brands must close pricing gaps between China and Europe.”
