What’s next for luxury brands in China after the 20th Party Congress? ‘Common prosperity’, continuing zero-Covid and rising nationalism – what they could mean
- Luxury brands have had to slash forecasts for their 2022 China sales after a rocky year. Are things looking any better after the 20th Party Congress?
- China’s middle class has seen its willingness to spend diminished by the zero-Covid policy, and the congress showed no sign of easing the its strictness
In 2021, despite the Covid-19 outbreak, China’s luxury sales surprisingly doubled compared with 2019 thanks to shoppers who, unable to go abroad due to travel bans, shopped domestically.
However, once the Omicron subvariant of the coronavirus started spreading, things took a turn for the worse.
The highly contagious strain gave the market a 2022 it never expected. With China’s dynamic zero-Covid policy, hundreds of cities have been through full or partial lockdowns, including fashion hub Shanghai.
Luxury brands slashed forecasts for their 2022 China sales from 18 per cent growth to 3 per cent, according to a report published in June after the Shanghai lockdown by Oliver Wyman, a consulting firm.
Brands hoped that good news would come at the 20th Party Congress, China’s twice-a-decade political event that sets a broad road map to the country’s future, economically and politically, which was held in October.
But did the congress promise a bright future for the world’s second largest luxury market?