Two of the major luxury brands are facing difficulties in the Chinese market. LVMH, in particular, laments the austerity measures implemented by Beijing as one of the causes of the decline. The world's largest luxury goods group saw revenue fall in the third quarter across Asia and especially China.
The demand for bags and cognacs, in particular, fell. Instead, things went better in Europe and the United States, where revenues rose by 5,7% to 7,4 billion euros in the last quarter.
Even the British Burberry would have suffered a slowdown in the Chinese market, where the growth in sales, although there has been, would have been below expectations. Burberry's chief financial officer Carol Fairweather told Reuters that the government's fight against corruption affected sales as did the war in the Middle East and the impact of the Ebola virus on global travel patterns.
Burberry, however, is happy with its performance, especially when compared with that of many opposing companies. "In the second quarter," Fairweather said, "we had single-digit revenue growth in both Asia and China." Things went even better in Hong Kong, where growth was double-digit.
In the recent Hurun Luxury CPI 2014 Report, the Shanghai-based research firm found that numerous spending areas in China have been hit as a result of Beijing's battle against excessive entertainment spending. Just two years ago, Chinese luxury spending reached record levels, making China the world's largest luxury market, according to consultancy Bain & Co. The same group now expects Chinese spending on luxury to fall 2% this year.
