LVMH warns: Chinese luxury demand shifts to local brands
LVMH, the owner of dozens of luxury brands, is experiencing revenue declines in the Middle Kingdom. The company warns that Chinese consumers are traveling less and tightening their belts abroad. Their attention is increasingly turning to local brands with luxury aspirations.
Stephane Bianchi, deputy CEO of LVMH, cautioned that Chinese customers are pulling back from travel and consumer spending due to signs of waning demand for luxury goods. She pointed out that in the last three months, Chinese tourists have been traveling abroad less frequently and spending less during their trips.
In the first quarter, the revenues of LVMH, a conglomerate owning 75 luxury brands such as Louis Vuitton, Christian Dior, Givenchy, Bvlgari, Fendi, Tiffany & Co., and Moët & Chandon, dropped by 11% in China. The company noted a similar decline throughout 2024.
Chinese have an appetite for "local luxury"
The deputy head of LVMH also noted that Chinese consumers are more interested in local brands. Without mentioning specific brands, he noted that some Chinese jewelry companies have seen a dramatic increase in demand.
Quoted by Bloomberg, Bianchi said it is unclear when demand in the U.S. will rise, given the ongoing uncertainty over tariffs. He added that the conglomerate will no longer be raising prices in the part of the business covering wines and spirits, stating, "We cannot raise prices indefinitely."
