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China sets new Covid record as luxury braces

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China is tightening its COVID-19 restrictions after hitting a new record number of daily cases on Wednesday, raising fears of a further recession for the country’s luxury market.

China’s National Health Commission said the number of locally transmitted COVID cases reached 31,444 on Nov. 23, up from the previous record of 29,317 in April 2022. The government has introduced new lockdowns in key regions, including Beijing, Shanghai and the production hub Guangzhou. Order mass samples.

“Consumer confidence has dropped dramatically since the beginning of this year,” said Adam Knight, co-founder of China-focused branding consultancy Tong. “The advancing lockdown, rising youth unemployment and declining economic performance are all taking their toll. As long as such uncertainty persists, with the lack of a central roadmap to get out of the situation, companies should expect continued pressure.

Repeated lockdowns have led to an economic crisis in China, with store closures and supply chain issues affecting Western fashion and beauty brands. Luxury executives around the world had hoped that Chinese President Xi Jinping would use the platform to announce a relaxation of the zero-Covid policy at the Chinese Communist Party’s National Congress in October. But eventually China reiterated its commitment to get out, rather than live with Covid. Estee Lauder, Capri Holdings and Tapestry have all recently cut their outlook, blaming China’s sanctions for the growth slowdown. Farfetch reported losses in China, while Ferragamo was able to overcome the disruptions with strong sales in Europe and the US. Richemont said sales had “flattened” in China. Ralph Lauren was an outsider who kept pace in China.

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“China’s luxury market is likely to slow [further] As more and more entry-level consumers decide to save more money because of the uncertainty associated with the zero-Covid strategy,” warned Antonello Germano, luxury business analyst at Chinese research and management firm Daxue Consulting. “However, luxury sales are unlikely to dry up completely, as the major high-income luxury consumers will continue to buy luxury goods. Affluent consumers are likely to turn to more cautious luxury during this period of economic downturn and as a result of the general wealth drive.” choose pieces [China’s strategy to address the wealth gap]Although.”

Source: www.voguebusiness.com

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