Marco Stamboglis’ Post

I recently wrote about several things that have been on my mind: exchange rates, China and handbags. They are all tied to Japan as well. The Japanese yen hit its lowest level since the 1990s earlier this year, leading tourists to flock to Japan and take advantage of the lower prices, especially on premium brands. For many luxury brands, Japan has been the only bright spot in their declining Asia-Pacific sales. Richemont, for example, reported an 18% year-over-year decline in Asia-Pacific sales, but a 59% increase in its Japan sales in its latest earnings report. The backdrop to all this is, of course, the shrinking luxury market in China—which for years has been a cash cow for luxury brands. But upon closer examination, the shift was really from Chinese consumers to the Chinese market, as more Chinese consumers chose to shop overseas. Kering reported that 30% of spending by Chinese nationals occurred outside of China, with close to 80% of their overseas spending remaining in Asia, including Japan. This raises an important question: How can brands capitalize on sales momentum in Japan amid the broader slowdown of the luxury market? Enter the pricing dilemma: while raising prices has historically driven revenue growth, it could backfire with local shoppers. #luxury #retail

Despite economic challenges, the Chinese luxury market is expected to grow by 4-6% in 2024, outpacing Europe and the United States. With the market twice as large as in 2019, domestic transactions are expected to account for 60-70% of spending. Gucci is targeting growth as part of this trend. The State of Fashion report predicts a permanent shift, with domestic purchases outstripping foreign purchases. Despite a difficult first half of the year, the latter part of 2024 is promising, buoyed by easing travel barriers and pent-up demand. Ambitious consumers and Chinese travel abroad remain focal points, reflecting a dynamic and resilient luxury sector. #ChinaLuxuryMarket #EconomicOutlook #LuxuryGrowth

Japan is now even more attractive than France in terms of pricing "Duty-free prices in Japan compared to those in China dropped from -18% in June 2023 to -24% a year later, with prices for some brands plummeting by -27%" according to Luxurynsight In the first quarter of 2024, the leading luxury groups recorded exceptional growth in Japan. LVMH's sales soared by 32% in organic growth, Hermès' sales surged by 25%, and Prada's sales increased by 29%.

📉 The luxury market is evolving as Chinese consumers shift towards value-conscious shopping. This change, reminiscent of Japan in the '90s, is challenging luxury brands to adapt and innovate. Stay tuned as we navigate these new market dynamics! 🌏💼 #LuxuryMarket #ConsumerTrends #GlobalEconomy https://lnkd.in/eFjyvjw6

The return of Japan as a reference for luxury in Asia is evident as luxury brands thrive in the country despite challenges faced in other parts of Asia. According to a recent Modern Retail article, LVMH reported 'double digit growth' in Japan for the first quarter, contrasting the sales decrease in other Asian regions. Similarly, Gucci's success in Japan sets it apart from global trends. The lower yen has attracted numerous customers from Mainland China, establishing Japan as a prime tourist shopping destination. #Japan #LuxuryMarket #RetailTrends https://lnkd.in/dHpPYcwv

Japan's Luxury Market at a Crossroads: Will It Boom or Bust?   Avery Booker, Jing Daily, LVMH, Kering, Armelle Poulou, Jacques Roizen, Jean Jacques Guiony #LuxuryBrands #JapanMarket #MarketTrends #ConsumerBehavior #LuxuryEconomy #BrandStrategy #RetailTrends #JapanLuxury #MarketDilemma #BusinessInsights

Luxury Goods Market Shows Signs of Weakness, Except for Japan The global luxury goods market has recently shown signs of weakness, with major players such as Hermès, LVMH, and Burberry experiencing a slowdown in revenue and profit growth in the first half of 2024. Despite Hermès' first-half revenue of 75.04 billion euros, marking a 15% year-over-year increase, the growth rate decreased by 10 percentage points compared to the previous year. LVMH's revenue of 416.77 billion euros saw a modest 2% year-over-year growth, signaling a significant decline in growth rate. However, amidst this global slowdown, the Japanese market has defied the trend and experienced an upswing. The weakening Japanese yen and increased spending by Chinese tourists have driven substantial growth in the luxury goods sector in Japan. Additionally, the UK-based luxury brand Burberry witnessed a 25% decline in operating profit, emphasizing the challenges faced by the global luxury goods market. # Thank you Hikari Takahashi for your submission!

What can luxury brands do to boost sales in China?

A big report finally goes out! 📣 👏 Speaking of luxury, it is my favorite sector. 👜 However, it is seeing moderating growth as many shoppers who aspire to purchase luxury goods feel the weight of inflation and become more cautious. 🛍 We expect premium luxury businesses to increase their global market share, while affordable luxury brands may experience a decline. And, by 2030, China 🇨🇳will surpass the US 🇺🇸 as the largest personal luxury market! Check out our newest 77-page report: https://lnkd.in/gT3GzxdR 👀

If there's one thing we know for certain, retail prices for luxury items will only increase year on year (possibly even multiple times a year as evidenced in recent cycles!). So what does this mean for consumers in the resale market? Check out this latest coverage by The Singapore Business Times where our COO Tresor Anne Tan contributed some insights on the luxury resale landscape. #luxuryfashion #luxuryresale #sustainableconsumption https://lnkd.in/gmWUxMtk