Buy buy buy! Last year, China's luxury goods market reached 607.7 billion yuan, accounting for about 22% of the world's
Chinese consumers “ignite” the luxury market
Yangcheng Evening News reporter Chen Zeyun
The enthusiasm and strength of Chinese people to "buy, buy, buy" luxury goods are back!
Recently, LVMH, the world's largest luxury goods giant, released its 2023 full-year performance report, with revenue reaching 86.2 billion euros, a year-on-year increase of 9%; net profit reached 15.2 billion euros, an increase of 8%. Its sales revenue and net profit both set new annual highs set in 2022.
Among them, in the fourth quarter of last year, LVMH achieved revenue of 23.948 billion euros, exceeding market expectations and increasing by 10% year-on-year. One of the main contributors to LVMH's performance growth is Chinese consumers. Jean-Jacques Guiony, chief financial officer of LVMH Moët Hennessy Group, revealed that the number of customers in China is now double that of 2019. The proportion of business from tourists has decreased relatively, but the revenue from this part remains the same as before. This means that domestic purchases in China have increased significantly, and to meet this demand, Louis Vuitton and Christian Dior are considering opening larger stores in China.
LV delivers impressive year-end results
On October 10 last year (local time), after LVMH announced its third-quarter quarterly report that was lower than expected, there was widespread talk that the demand for high-end luxury goods was "reducing". However, with the strong assistance of Chinese consumers, LVMH finally handed over a A brilliant year-end report card.
Looking at the departments specifically, in the past year, the revenue of the fashion and leather goods department of Louis Vuitton and Dior reached 4.217 billion euros, an increase of 9% compared with the same period last year; the sales of the perfume and beauty department increased 7% year-on-year to 8.27 billion euros; The revenue of Bulgari's jewelry and watch division increased by 3% year-on-year to 10.9 billion euros; the boutique retail division of DFS and Sephora benefited from the recovery of global travel retail and became LVMH's best-performing division in 2023, with revenue rising year-on-year. 20% to 17.885 billion euros.
The wine and spirits division was the only division to experience a decline in performance, with revenue falling 7% year-on-year to 6.602 billion euros.
In terms of regions, in 2023, the revenue contributed by the U.S. market will increase by 4% year-on-year, and its proportion of annual revenue will decrease by 2 percentage points to 25%; the revenue contributed by the Japanese market will surge by 28% year-on-year, accounting for 7% of revenue. %, the same as the previous year; the revenue contributed by the Asian market (excluding Japan) increased by 18% year-on-year, accounting for 31% of revenue, an increase of 1 percentage point from the previous year; the revenue from the European market increased by 13% year-on-year, accounting for 31% of the revenue. The proportion of revenue is 25%, which is also an increase of 1 percentage point from 2022.
It can be seen that the influence of Asian markets, including China, on LVMH is gradually increasing. Previously, LVMH Group had stated that Chinese tourists’ overseas consumption has begun to recover. Although they have not yet fully returned to Europe, their consumption performance in Japan has recovered rapidly and is close to the level of 2019 before the epidemic.
"The number of our Chinese customers has grown significantly and continues to grow." Jean-Jacques Gioni, chief financial officer of LVMH Group, said, "In 2023, the number of Chinese consumers in the group will be twice that of 2019, which means that Domestic purchases in China have increased significantly. To meet this demand, Louis Vuitton and Dior are considering opening larger stores in China."
Big luxury brands continue to bet on the Chinese market
"Whoever wins China will win luxury goods all over the world." Is this statement still true today? This may be evident from the “footprints” of the top leaders of luxury goods giants.
Just last June, LVMH head Bernard Arnault made a special trip to China. This is his first visit to China after 2019. From SKP and Taikoo Li to Zhang Yuan and Central, from Beijing and Chengdu to Shanghai and Hong Kong, Arnott's "special forces store inspections" in one city a day have attracted global attention.
Not only LVMH, in the face of the macro situation of global economic downturn, betting on the "Chinese market" is still the first choice for global luxury goods giants during the period of slowdown in performance.
French luxury goods giant Kering's sales in the first three quarters of 2023 were 14.6 billion euros, a year-on-year decrease of 3% on a reported basis. Although the performance is not ideal, Chinese consumers are still the backbone of the group. In the third quarter, the revenue contributed by the Chinese customer base increased by 20% year-on-year.
At the end of January last year, Mr. Sauvage-Henri Pinault, Chairman and CEO of Kering Group, also visited major consumer cities such as Shanghai, Beijing, Chengdu, and Nanjing, and came to China again two months later in March to attend the China Development Summit. forum.
Hermès sales in Greater China also remained strong. Its financial report for the first three quarters at the end of September 2023 showed that its comprehensive revenue reached 10.063 billion euros, a year-on-year increase of 22% at fixed exchange rates. In terms of regions, the Asian region where China is located (excluding Japan) has a relatively large base and the growth rate is not obvious, only 10.2%. However, it contributed 1.575 billion yuan in sales to the entire market, accounting for the total in the third quarter. Accounting for 46.80% of sales, it has undoubtedly become the world’s largest market.
Durgoué, executive vice president of finance of Hermès, specifically mentioned in the conference call: "The traffic of mainland stores continues to grow strongly, business rebounded strongly in July and August, and accelerated growth in the third quarter. China's mid- to long-term development potential remains strong, and the economy is recovering. growth, the middle class will further expand, which is why we continue to invest."
How effective are Chinese people in buying luxury goods?
The "China Luxury Goods Report" released by Yaoke Research Institute shows that in 2023, the global luxury goods industry market size will reach 2,723.2 billion yuan, a year-on-year increase of 7%; Chinese luxury goods consumption will resume growth in 2023, recording a 9% growth rate Rapidly, it has reached 1.042 billion yuan, returning to a trillion-yuan market scale. Chinese luxury goods consumption accounts for about 38% of global luxury goods consumption.
Zhou Ting, chief researcher of the report and president of the Yaoke Research Institute, said that the international luxury goods industry is reshaping the international wealth pattern, and the Chinese luxury goods industry is becoming the core force promoting China's consumption growth. It is understood that in 2023, China's luxury goods market will achieve 11% growth, reaching 607.7 billion yuan, accounting for approximately 22% of the global luxury goods market; the proportion of Chinese domestic luxury goods consumption has increased by 1% to 58% year-on-year, and Chinese people abroad Luxury goods consumption accounted for 42%.
The report predicts that in 2024, the growth rate of China's luxury goods market is expected to be around 12%, which will be slightly equal to the growth rate of the global luxury goods industry. The outflow of luxury goods consumption among Chinese consumers will be further curbed. China's regional luxury goods market will account for The proportion of the luxury goods market will enter the normal range of 60%-65% in the next few years.
Looking at cities by city, Shanghai, Beijing and Sanya will continue to lead the list of core cities for luxury consumption in China in 2023. Shanghai will become the city with the largest luxury consumption in China with 53.5 billion yuan, and Beijing and Sanya will have luxury consumption at 52.3 billion yuan respectively. , 45.5 billion yuan; Haikou has become the city with the fastest growth rate of luxury goods consumption in Chinese cities, with a growth rate of 89% to 8.9 billion yuan. (Yangcheng Evening News)