Through a series of webinars, I recently had the chance to share my view on the luxury market in a candid discussion with over 200 luxury brand leaders from around the world. The series was thought-provoking, eye-opening, and even shocking to some participants, initiating deeper reflection on the need for radical change.
My conviction is that luxury brands must be brutally honest about the magnitude of change occurring in the luxury industry. We are not just living in times of disruption and rapid change; we are witnessing the most fundamental change in the recorded history of luxury.
The pandemic disruption has already rattled the luxury industry to its core. With a handful of exceptions, most luxury brands lost money in 2020, with drastic declines in their core regions (Europe and North America). But to assume that this was just a result of closed stores during lockdowns underestimates the deeper shifts happening.
Meanwhile, China’s rapid growth during 2020 was, in its unprecedented magnitude, a one-time effect. These gains were mostly driven by travel restrictions, forcing Chinese customers to purchase their luxury goods in Mainland China rather than Paris, Milan, Florence, or New York. It also meant they redirected their budgets — normally reserved for overseas trips — towards purchases of jewelry, handbags, fashion items, cars, and more. Once travel is possible again (some predict by mid or late-2021), many of these one-off effects will vanish. While I predict China will still be the clear growth driver of the luxury industry in this decade, we can’t expect growth rates like those in 2020. Read More at https://jingdaily.com/luxury-game-new-rules-china-gen-z
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