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Luxury brands turn to China for growth amid global slowdown

  

Luxury brands are turning to China to push growth amid the global downturn during the COVID-19 pandemic. They have been facing a tough market outlook since the start of the Coronavirus crisis, as a result of closure of many stores and manufacturing sites. Statistics compiled by Bain & Company shows, the luxury goods market has contracted around 25 per cent in the first quarter of 2020. Kering, the parent group of Gucci, Alexander McQueen and Yves Saint Laurent, was able open Chinese stores much earlier than other stores across the globe.

The company reported a 6.4 per cent growth in sales in its Chinese market during the first half of 2020. According to the company's financial report, its business in the Chinese mainland was boosted by strengthened consumer spending power and an uptick in economic activities. One of Kering’s most notable brands Gucci saw sales in the Asia-Pacific region contract 24.6 per cent, However, its business in China is seeing robust growth since mid-April.

One of the world's largest luxury brands the LVMH Group also reported a strong recovery in the second quarter in China, despite impacts from the COVID-19 pandemic on its global revenue in the first half of 2020. The luxury group, whose revenues dropped by 27 per cent in the first half of 2020 compared to the same period last year, saw a strong rebound in China market.

 
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