OpinionFrom handbags to hand sanitisers, how coronavirus could change China luxury market

Being in lockdown because of a health emergency may give Chinese shoppers who’ve sustained the luxury fashion industry pause for thought

Once it is over, will they still be as mad for the latest luxury items or re-evaluate their priorities and favour fitness, well-being and friends instead?

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Shoppers in Hong Kong have essentials such as toilet paper and tissues on their mind more than the latest luxury “must-have”. Photo: Bloomberg

Published: 2:00pm, 20 Feb 2020Updated: 2:05pm, 20 Feb 2020

While the coronavirus outbreak is first and foremost a human tragedy that has cost thousands of lives and brought China to a virtual standstill, the financial fallout from the outbreak is not to be dismissed.

The luxury industry in particular, reliant as it is on Chinese shoppers both at home and abroad (last year China became the largest luxury market in the world), has been deeply affected by the outbreak. Many fashion brands have had to temporarily close stores in the country, and the number of Chinese visitors to Europe has plummeted due to flight cancellations and travel bans.

Luxury CEOs, however, are not panicking. “The first reaction is: ‘Don’t panic, let’s calmly analyse the situation,” LVMH boss Bernard Arnault said last month.

“If it dies out in two months or two months and a half, it’s not terrible. If it takes two years, that’s a different story,” he added.

Obtaining protective face masks takes priority over whatever this LVMH store is selling. Photo: Bloomberg

His sentiments were echoed by Francois Pinault, chairman of Kering, LVMH’s main competitor, who expressed faith in China’s ability to bounce back and confidence that things would improve in the second half of the year.

But what if the coronavirus has a much deeper and long-term effect on the psyche of the many free-spending Chinese who for the last decade have made conspicuous consumption of luxury goods their favourite pastime? Will a human tragedy of this scale make the Chinese people re-evaluate their priorities?