Coronavirus Fears Heavily Impact Luxury Sales
As the second largest luxury goods market in the world, China's sales have taken a hit amid the coronavirus crisis, which has seen a multitude of global events cancelled and call for non-urgent travel plans to be postponed.
Increasing amounts of people are confined to their homes in isolation as the virus spreads to other countries, most recently affecting South Korea and Italy, and as such, shopping for luxury goods is not a priority for consumers.
Luxury conglomerates LVMH and Kering, as well as brands such as Burberry, have all experienced a drop in Chinese sales in recent months, as consumers are prioritising the purchase of medical equipment and protective gear like face masks – which are becoming as coveted as luxury items. Additionally, brands like Versace, Michael Kors and Ralph Lauren have closed a majority of their stores in China, owing to a lack of footfall.
Global luxury-focused events such as Watches and Wonders, Shanghai Fashion Week, Art Basel Hong Kong and Salone del Mobile – all of which are important trade events for Chinese business and suppliers – have all been postponed. However, it remains to be seen how much of an effect these cancellations and travel restrictions will have on the Chinese luxury market as the coronavirus fears evolve.