We keep waiting but it has yet to happen, having the Chinese client be the big luxury shopper they once were. With rotating lockdowns, COVID stress in mainland China, and tough government shopping rules to create an all equal society in the communist country, the Chinese luxury buyer has yet to rebound to predictions for post-pandemic.
In 2020, China made up about 20% of the world’s personal luxury goods market. The expected recovery was even expected to out due North America and Europe as the world’s top market by 2025. The US and Europe rebounded in the luxury goods sector but still not in China.
The reason: COVID’S affect on shopping urgency and President Xi Jinping’s “Common Prosperity Doctrine.” It is changing Chinese consumer habits and former luxury shopping habits. He announced the Doctrine in 2021. If you are not aware; it aims to lessen income inequality in China. It deemphasizes visual showings of wealth. It discourages Chinese citizens from buying things in the global consumer economy. It pushes domestic made-in-China. Many of these policies are being enforced through aggressive crackdowns and tough actions.
Harsh Covid-19 lockdowns in major Chinese cities have continued to stop consumers buying and quashed their desire to shop, along with global supply problems. Luxury brands must realize that this market is not likely to come back to what it was anytime soon and now fully plan around this loss of client, market and revenue.
Photo credit: Christian Lue | Unsplash
