Bain & Company\u2019s new report reveals that China\u2019s personal luxury sales contracted 10% year on year in 2022, ending its five-year run of exponential growth. However, positive conditions are expected to return before the end of the first quarter of 2023.<\/p>\n
Despite a strong start to 2022, Covid-related lockdowns from the second quarter created barriers to purchasing. A decline in the real estate market, higher unemployment, and anxiety around Covid also weakened consumer sentiment, Bain said.<\/p>\n
All luxury categories were affected by the decline to varying degrees. Categories with strong online penetration were less affected by lockdowns and fared better. For example, with 50% online penetration, luxury beauty only contracted 6%.<\/p>\n
Online penetration was lower in other segments (10-15%), leaving them more exposed during lockdowns. The watch market saw the steepest decline, with sales falling 20-25% from 2021. Fashion and lifestyle categories experienced a 15-20% decline. Jewellery and leather goods performed slightly better, contracting 10-15%.<\/p>\n
Bruno Lannes, a Shanghai-based senior partner at Bain & Company, said, \u201cWhile most brands saw declines in 2022, a few stayed flat or grew despite challenging conditions. Three factors contributed to their success \u2013 first, bigger brands out-performed smaller players on average; second, brands with iconic portfolios did better than those with trendy or seasonal merchandise and finally, brands with a higher concentration of Very Important Clients (VICs) fared better.\u201d<\/p>\n
Bain & Company expects growth to resume in 2023 as China recovers from Covid. The fundamentals of consumption in China are still intact. Compared to other emerging markets, China is a behemoth for luxury growth. It has a larger number of middle- and high-income consumers, and these populations are projected to double by 2030, it noted.<\/p>\n
Weiwei Xing, a Hong Kong-based partner at Bain & Company, added, \u201cLuxury consumption will recover as Covid subsides, mall traffic improves, and consumer sentiment rebounds. We expect to see 2021 sales levels sometime between the first and second half of 2023. While optimism abounds, there are also risks. Brands need to resolve pricing gaps between China and Europe before international travel resumes. In addition, as more Chinese HNWIs are residing outside of China, luxury brands must deliver excellent experiences everywhere in the world.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Bain & Company\u2019s new report reveals that China\u2019s personal luxury sales contracted 10% year on year in 2022, ending its five-year run of exponential growth. However, positive conditions are expected to return before the end of the first quarter of 2023. Despite a strong start to 2022, Covid-related lockdowns from the second quarter created barriers…<\/p>\n","protected":false},"author":1,"featured_media":19753,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[83],"tags":[],"thb-sponsors":[],"class_list":["post-19752","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bulletin"],"acf":[],"yoast_head":"\n