2014 appeared to be a miserable year for the luxury goods market in China, as evidenced by the closure of many luxury brand stores and the ouster of a number of their executives.
Those which shut down some stores in the year include Hugo Boss (seven stores), Ermenegildo Zegna (six) and Burberry (four), while lackluster performance forced some executives to step down, including Zhang Yaodong, vice president of L’Oreal China, and Deng Wanying, president of Asia-Pacific operations for Kering of France, the world’s third-largest luxury goods brand. A jittery mood pervades the local luxury market in China, as many wish to buy high-end items but fear for their jobs should they do so under the government’s frugality and anti-graft drive, according to the Shanghai Securities News.
The exodus of luxury brands from the Bund in Shanghai, formerly a center for trade in high-end goods, mirrors the trend.
In 2014, China’s luxury goods market dropped 11% to US$25 billion, accounting for 11% of the global share, down from 2013’s 13%, according to the report.
In contrast to shrinking domestic consumption, overseas consumption of luxury goods by Chinese buyers jumped 9% to US$81 billion in 2014, boosting the total consumption of luxury goods by Chinese people worldwide to US$106 billion, 46% of the global luxury goods market.
Read more at Want China Times.