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Sales stagnation in China

In November in China, the weather is getting colder. At the same time as this cold snap, there are financial reports released by various luxury goods groups.

Recently, Richemont, the world's second-largest luxury goods group, which sells hard luxury products such as jewellery and watches, released its first-half financial results for the year ended September 30, 2014. The group's net income in the Chinese market fell. 4%.

Although this decline is better than 10% in the same period last year, Gary Saage, the chief financial officer of Richemont Group, is still cautious in the analyst conference call that sales of "hard luxury" products in the Chinese market are stagnant. The trend is getting better.

Even Hermès, which performed well in the global market, its Asia-Pacific region's revenue in the third quarter was also worrisome in the context of political instability in Hong Kong and the slowdown in the Replica Luxury Handbags Online Store, with an increase of only 10.2%. Among them, the watch category continued to deteriorate under the impact of the Asia-Pacific region, especially the Chinese market. The revenue decline increased from 12% in the second quarter to 14.4%.

Another Italian luxury brand, Fake Prada Handbags, which uses the Chinese market as its growth engine, reported a net sales of 735 million euros in Greater China in fiscal 2012, but its net profit for the interim results as of July 31 this year was only 245 million euros. Compared with the same period of last year, the Prada Group expects that the growth will further slow down in the coming year under the influence of weak demand in China and Europe and anti-corruption in the mainland.

Yang Zhen, general manager of Interbrand Beijing, noted that some high-end brands are directly affected by external factors such as China's anti-corruption policies and market environment. And more and more Chinese consumers are starting to shop overseas with lower tariffs and VAT, which is also considered to be one of the reasons for the stagnation of luxury brands in China.

China's luxury goods market research institute Fortune Quality Research Institute's latest China Tax Exemption Report shows that in 2017, Chinese people bought 47% of the world's luxury goods, about $102 billion, but only $28 billion in consumption remained in China. Within the territory, China's luxury consumption outflows are 73%.

[DerbyStan]

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[Alexander12]

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