China was one of the first countries in 2020 to successfully emerge from the pandemic, after stringent lockdowns enforced by the government curbed the spread of Covid-19. In May that year, the term ‘revenge shopping’ was coined, where a sharp growth in purchases after a period of crises sees consumers returning to stores.
Queues outside luxury boutiques
In China’s top tier cities queues were seen outside luxury boutiques from Gucci and Prada to Hermes and Louis Vuitton. The luxury and fashion sector saw great increases in spending on higher valued goods.
Several lockdowns later, where cities like Chengdu, Beijing, Shenzen and Shanghai were either again isolated or locals had to provide valid PCR tests for each commute or visit to public spaces, including having negative tests to enter boutiques, and China’s government is once again easing restrictions.
China’s zero Covid policy led to multiple protests in recent weeks, and a loosening of restrictions is bringing a buzz back to retailers shopping, and luxury brands.
Data published by Intarget, an advertising company based in Italy and Shanghai, is predicting China’s domestic luxury market will see a strong uptick local demand. Growth in the APAC region will outpace that of luxury, and is forecast at 7.9 percent CAGR versus 6.7 percent CAGR for the total luxury sector over the next five years.
In fashion, accessories and menswear are two categories expected to bolstered by the demand. Italian exports of luxury jewellery to China increased by 207 percent between 2019 and 2021, reported the Italian newsoutlet Pambianco, and Italy’s luxury houses are bracing for a new wave of APAC growth and investment.
China in lockdown as the rest of the world emerged
Reports of full World Cup stadiums with thousands of football supporters in public have been edited by Chinese media, who have been keen to keep the ‘business as usual’ visuals from local citizens. But as cities reopen Chinese consumers are gasping to go back to living like in pre-Covid times, and opportunities for western brands await those who understand the Chinese consumer’s changing needs and taste.