MILAN, Oct. 26 (Class Editori) -- China's demand for luxury goods is strong. The positive trend of the country has been confirmed during October Golden Week as well, although at a slower pace. During the celebration of the People's Republic of China from October 1 to October 7, the performance of the fashion and luxury sector remained positive, with growth trend standardizing after a slight decline recorded in August. In more detail UBS's analysis highlighted data related to CR Land, China's major luxury shopping malls.
According to what Annie Lie, Head of Investor Relations of the Group, told the investment bank’s analysts, during the Golden Week the high-range product category outperformed the overall portfolio, despite a slight sequential slowdown compared to 2019, with CR Land malls a 16% increase y-o-y and a 32% one in comparison to the pre-pandemic year. It is important to notice that 2021 growth has been driven by a higher average purchase value since traffic has been like 2019's one, thus confirming ongoing strong trends in the domestic Chinese market.
During the first half of 2021, the company had 48 active department stores — 20 of which are considered the top mall by retail sales levels in the metropolis where they are located, while as many as 38 rank among the top three in the city — and 60 malls construction, mainly based in Tier 1 and 2 cities in Mainland China. Moreover, in the first six months, revenue reached 50.6 billion yuan, namely over 6.82 billion euros, with an annual 87% increase. In terms of categories, luxury accessories, including jewelry and watches, grew by more than 100% in the first half of 2021 compared to last year, outperforming leather goods, which rose more than 70%.
Despite the tightening of the comparable basis, experts at UBS continue to express long-term optimism about the luxury category in China, thanks to both the support of the common prosperity campaign launched in September by President Xi Jinping and the sustained repatriation of spending linked to improved product availability and service standards at the local level. "The situation outlined by CR Land confirmed our positive view on the luxury sector, despite near-term uncertainty related to the volatile macroeconomic environment and the risk of restrictions due to Coronavirus," UBS analysts explained. "Common prosperity is considered positive as Beijing's ultimate goal is to expand the middle class, which means that more people will be able to afford high-end spending".
And although there are concerns about possible new restrictive measures for public safety, China has not imposed many limitations on mobility and most citizens are still allowed to move around freely. In fact, according to CR Land, this year's Golden Week was characterized by a surge in the number of domestic travelers, which supported the recovery of tourism revenues.
(Source:Class Editori)
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A single purchase
