SHANGHAI (Reuters) – Chinese people will again be allowed to travel abroad from January 8, but professionals in the luxury sector do not expect to see their usual customers rushing to stores in Paris or Tokyo after getting into the habit of sourcing locally.
Given the drastic restrictions related to the “zero Covid” policy imposed by Beijing until last month to fight the COVID-19 pandemic, large luxury companies have invested in China to offer an alternative to buyers who could no longer to travel.
While the Chinese bought about 70% of their luxury goods from overseas until early 2020, domestic sales doubled during the first two years of the pandemic, reaching 471 billion yuan (64.5 billion euros), according to data from the consulting firm Bain & Co.
This did not prevent the share of Chinese consumers in the global market from 25% to 21% between 2019 and 2021.
“We will not return to 70%,” said Jonathan Yan, of the Roland Berger consulting firm in Shanghai. “I’m sure people will continue to buy abroad because it’s natural when you travel, but we should be closer to a 50-50 ratio,” he adds.
Many companies in the sector, such as the French Louis Vuitton, one of the brands of the LVMH group, or the American Tapestry, have opened new stores over the past three years and organized fashion shows in China to build customer loyalty.
Travel restrictions and incentives have also spurred the rise of duty-free shops on the Chinese island of Hainan, whose share of domestic luxury goods trade has risen from 6% before the pandemic to 13% in 2021. .
By 2025, foreign luxury brands will be able to open their own duty-free shops in China instead of having to partner with local partners, such as China Duty Free Group.
Jonathan Yan, Roland Berger’s consultant, thinks Hainan’s room for improvement is significant, with only 13% of Chinese having a passport.
The reduction in import taxes on luxury products decided by the Beijing government in 2018 and 2019 has also made them more attractive on the Chinese market, with a price differential no longer exceeding 10-20%, compared to 50 -60% previously.
In this context, Luca Solca, analyst at Bernstein, does not expect a significant recovery of Chinese tourism in Europe before 2024.
Since the announcement of the lifting of travel restrictions, internet searches and bookings have mainly benefited regional destinations such as Hong Kong, South Korea and Japan.
(Report by Casey Hall, French version Tangi Salaün, edited by Blandine Hénault)
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