How Do Italian Luxury Retailers Connect with China in 2022?
Italy’s cultural and artistic heritage has made the country one of the world’s most popular tourist destinations, attracting millions of visitors every year. Whether it’s touring the country’s historic jewels like the Colosseum, or taking a traditional Venetian gondola ride through the city’s canals, tourists love it.
Prior to the pandemic, their number was at an all-time high: In 2019, inbound travelers to Italy had set a historical record reaching 436.7 million visitors. Given this, Italy’s economy heavily relied on these travelers as, besides hotels and restaurants, tourists who contributed a significant income to Italian luxury retailers.
Rinascente, the only luxury department store in Italy, recorded tourism spend in 2019 that accounted for 35 percent of its revenue. With a footprint covering nine major cities of Italy, the high-end retailer is emblematic of the issue, as, in the following year, those numbers sharply declined amid the COVID-19 outbreak and international travel bans. Because of the shortage of foreign tourists, Rinascente saw its revenue drop by 40 percent.
These idyllic holidays are now a thing of the past; so, too, is China’s spend in the country. Not great, considering the nation had ranked among the top five in terms of incoming tourists. “The lack of Chinese visitors has been a hard hit for the Italian high-end sector. Companies there had to quickly adapt their business to the new scenarios,” said Nicola Giuggioli, founder and chairman at Eco Age. “Yet, the sales decline has been inevitable.”
Without tourists, retailers have had to double down on local spend. But residents’ budgets and appetite for luxury have turned out to be visibly lower than Chinese globe-trotting shoppers.
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