China’s anti-corruption attitude is tough Asian tourists demand is weak
Europe’s luxury market has fallen into a trough
According to China Daily, Asian tourists’ shopping spending in the flagship store of Louis Vuitton in Paris shows signs of slowing down. A retailer said, ‘This year, the number of tourists in China has decreased compared to the past, and I don’t think sales will be too good this year.’
It’s not just Louis Vuitton that encountered this situation. Reuters surveyed 23 luxury brands in London, Paris and Milan, including GUCCI, Hermes, and more than half of them have encountered Market downturn. This is undoubtedly a huge blow to the European luxury industry, because the demand of Chinese tourists alone accounts for about 1/3 of the entire European luxury market, and even 70% of buyers in the watch and jewelry field are tourists. During the general economic downturn in Europe, Asian tourists were the main driver of the European luxury goods market.
More and more rumored evidence suggests that at least the luxury market will be sluggish in the short term. The analysis said that this was related to people’s concerns about the global economy and the general tax hike in European countries. In addition, China’s new leader’s tough attitude to combat corruption has curbed the phenomenon of illegal gift giving.
Retailers at boutiques such as Bottega Veneta in Paris and Longchamp in London also told Reuters that there have been very few tourists in recent weeks. In the Gucci store in central Paris, as the number of tourists has decreased significantly, the shoppers are walking around waiting for the arrival of customers.
Price factors may also affect tourist demand in some ways. Some brands have adopted price increases in order to increase profit margins. For example, a canvas bag brand of Louis Vuitton has raised prices by about 10% in the euro area. In addition, there are more temporary factors, such as the unusually cold March in Europe this year, which makes brand demand weak in spring and summer.
Another indicator is the export of Swiss watches. In February, Swiss watches exported to China fell by 27%, the worst monthly record in three years. The CEO of the Swiss Parmigiani brand said: ‘Some Chinese have become very cautious in buying watches.’