In China as coronavirus quarantine measures relax, Chinese shoppers are slowly being able to return to their passion for luxury shopping.
There is already talk of ‘revenge spending’ – luxury brands are hopeful that consumers’ pent-up desire to live life to the full again will help them recover from the major hit to sales the pandemic has caused.
One view is that a post-crisis boom will see spending on high end fashion and beauty products reverberate around the world, as soon as Covid-19 becomes contained, and normal, healthy shopping habits resume.
According to Bloomberg, store traffic in China is creeping back up after falling as much as 80% at the virus outbreak’s peak there earlier this winter.
Luxury on the rebound
It was widely reported at that time that sales of brands ranging from Burberry Group Plc to Kering SA’s Gucci suffered as luxury shopping was put on hold.
“The recovery could accelerate in the coming weeks, fueled by so-called “revenge spending” sprees,” says the Bloomberg report.
Amrita Banta, managing director at Agility Research, used the term – previously used to describe pent-up Chinese consumer demand that was unleashed in the 1980s after the chaos and poverty of the Cultural Revolution – to describe buying by luxury clients who have high spending power after weeks of cancelled plans.
China’s recovery will be watched with interest
“China seems to have turned the corner and bigger cities are showing cautious optimism,” she said. “We see a slow but definite bounce back.”
Chinese shoppers made up more than one-third of the luxury industry’s sales and about two-thirds of its growth in recent years, says Bloomberg.
Beijing imposed lockdowns in late January to stem the spread of the coronavirus. Unfortunately this impacted the key Lunar New Year holiday period – normally boom time for Chinese retailers.
In every country the economic impact of Covid-19 will be severe. Job losses and a dent to consumer spending power will be unavoidable. For some consumers however, abstinence from shops and restaurants for several months, will leave bank accounts relatively healthy, and the urge to enjoy the pleasures of visiting shops and bars once again could help re-charge economies when the situation finally eases.