In every imaginable way, 2020 has been an unusual year for the global luxury industry. With stores shuttered for months and an economic recovery crimped in a hard-hit United States and a virtually tourist-free Europe, retail strategies and expectations have been upended by the ongoing Covid-19 pandemic. But perhaps the most important luxury market shift of 2020 has been that Chinese shoppers are spending far more domestically than in years past, when they made the majority of luxury purchases abroad.
With revenues from China offsetting lackluster sales figures elsewhere, many luxury brands welcomed this surge in domestic shopping. Prada said its monthly group-wide China sales rose 60% in June and 66% in July, while luxury giant LVMH saw revenue from China in its fashion and leather goods division jump by more than 65% in the second quarter of the year.
With Chinese consumers spending more time in boutiques closer to home or even staying in to shop online via Tmall’s Luxury Pavilion or through a wealth of e-commerce livestreams on various platforms, luxury brands have had to move quickly and adjust to a new shopping reality.
Whereas previous years saw brands marketing heavily to China with the understanding that most big-ticket purchases would actually be made at boutiques in Tokyo, Paris, or New York, now content strategies must confront the new normal. Chinese shoppers are more willing and able to make purchases more quickly and with less shopping around than in the past, when many would compare prices at shops around the world and ultimately make the purchase via daigou agents or traveling friends or family.
Meanwhile, brands have had to contend with the very different landscape of 2020, shaped as it is by the Covid-19 pandemic. With runway shows and extravagant, celebrity-packed parties largely off-limits outside of China, we have seen brands go all-in on livestreaming, mix online and offline efforts in interesting ways, or focus on allocating their marketing budgets more toward digital.