Prior to the pandemic, Chinese shoppers made 70 percent of their luxury purchases abroad. Now, not so much.
When the China’s lockdown was first put in place, it ended a wave of Chinese tourists visiting international capitals to splurge on designer brands. Before the viral outbreak in early 2020, Chinese shoppers bought 70 percent of their luxury goods abroad in tourist-driven destinations like Paris, Milan and New York. According to consultancy group Bain & Co.
“Most luxury brands were bracing for a very steep V-shaped recovery in sales in mainland China after the end of the Shanghai and Beijing lockdowns, which affected the business in the spring,” Erwan Rambourg, global head of consumer and retail research at HSBC, told the“Apart from Hermès and Moncler, who experienced strong growth in the market, the rest of the sector has seen very muted growth or— more commonly—no growth at all.
While many international destinations have already relaxed their travel restrictions, many Chinese tourists are opting to stay within Asia. Among Chinese travelers, the top five destinations booked when the regulations fell were Singapore, Japan, Thailand, South Korea and Hong Kong. All of this has some industry analysts questioning whether Chinese shopping abroad will ever return to pandemic levels.
“It won’t go back to 70 percent,” Shanghai-based Jonathan Yan, a principal at consultancy Roland Berger told. “I’m sure there will still be a portion of luxury spending happening in other countries because it’s natural for people to shop when we travel, but it will be more like 50-50.” Whether Chinese tourists will return to international destinations in the spring and summer remains to be seen. For their part, luxury brands in Europe and the US will be crossing their fingers.
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