The Chinese economy has been slowing down in recent months, and the government has just launched measures to stimulate economic activity. It is in this context that the world’s number one luxury goods company LVMH fell by more than 5% on the Paris Stock Exchange this week, after announcing a 14% drop in its net profit in the first half, faced with the slowdown in Chinese demand.
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With our correspondent in Beijing, Clea Broadhurst
French luxury giant LVMH is facing a slowdown in consumption in China, one of its key markets. According to Tang, founder of luxury goods consultancy No Agency, this is due to a polarization of social classes.
“ Considering the price increases in the luxury goods industry in recent years, many middle-class consumers who could previously afford entry-level products have been priced out, he analyzes. There was an increase in prices, and that eliminated those customers. »
But Tang points out that it is also because consumers are going abroad, particularly to Japan, to buy products that have become too expensive in China: ” The increase in spending in Japan comes mainly from lower-tier consumers in the luxury market. These consumers are relatively well-off middle-class people in China, but they are considered lower-tier consumers in the luxury market in Japan. »
Everyone is facing the same economic environment, which affects demand. The question is how long Japan will be attractive to Chinese consumers.
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