Decreased Travel and Spending Among Chinese Consumers, According to LVMH's Deputy CEO
French luxury conglomerate LVMH has outlined a shift in consumer spending patterns for two of its key markets: the United States and China. According to Deputy CEO Stephane Bianchi, Chinese consumers have been cut back on spending and traveling over the past three months. Concurrently, the U.S. market shows early signs of rebound, albeit while facing ongoing trade tensions with the European Union.
The U.S. luxury market has emerged as the world's leader in online sales, generating projected revenue of $21 billion in 2025. American consumers are demonstrating a growing preference for digital shopping and unique experiences, such as curated travel and exclusive events. While the U.S. luxury market faces trade tensions with the EU and China, its strong domestic demand and e-commerce infrastructure have so far protected it from significant immediate impact.
In contrast, China, with its vast share of global luxury demand, is projected to witness a slight decline in spending in 2025 due to domestic economic pressures. Affluent Chinese consumers are increasingly leaning towards mid-tier brands and exhibit more restraint in high-value purchases. You‘ll find that younger generations, namely millennials and Gen Z, are driving consumption, with a focus on self-expression and digital engagement. Travel and luxury shopping in Europe, a traditional destination for Chinese consumers, have been impacted by domestic economic uncertainty and trade and political tensions with the EU.
The trade and political strife between China, the EU, and the U.S. have not halted Chinese luxury demand entirely, but they have forced it to evolve. Chinese consumers are preferring online channels, digital marketing, and local or regional experiences.
In conclusions, the U.S. luxury market is projecting growth, especially in online sales, while China's luxury consumption is confronting economic challenges and trade tensions, resulting in a more cautious approach and a shift towards domestic and digital shopping. Luxury brands are adapting to the new situation by tailoring their offerings to local tastes, leveraging digital platforms, and focusing on resilient segments such as online sales in the U.S. and digital-native youth in China.
Business trends in the luxury market show a shift towards online sales in the United States, with projected revenue of $21 billion by 2025, reflecting American consumers' growing preference for digital shopping and unique experiences like curated travel and exclusive events. Concurrently, lifestyle changes in China result in a slight decline in spending due to domestic economic pressures and a shift towards mid-tier brands, digital engagement, and local or regional experiences. This evolution in Chinese luxury consumption is driven by its affluent consumers' focus on self-expression and millennials and Gen Z generations.
