A pedestrian walks by the SKP Beijing mall in Chaoyang district on Saturday. (Photo: Li Xuanmin/GT)
Luxury lives in China
China's luxury product market started growing again in 2016 after three straight years of stalling. The return to growth resulted largely from luxury brands lowering their prices, diminishing the long-grumbled-about price gap between the Chinese mainland and other markets, consumers and analysts said. Luxury brands have seen sales jump as they have moved sales channels online, hoping to reach younger shoppers and potential consumers in second- and third-tier cities.
After three years of flat sales, luxury products are back in vogue on the Chinese mainland.
At SKP Beijing, a high-end shopping mall in Beijing's Chaoyang district, consumers flooded the high-end luxury store for brands such as Chanel, Burberry, LV, Fendi and Gucci over the weekend. In some stores, there weren't enough sales people to serve the seemingly relentless waves of customers.
"Foot traffic is up about 20 percent from the same period in 2016," said an employee at Cartier SA's store, who preferred not to be identified. "Jewelry sales were the first to pick up, then watches," she said.
The employee told the Global Times on Saturday that the French jewelry maker had its best Valentine's Day ever in terms of sales this year.
For the holiday, Cartier rolled out a special service on its WeChat store, We-Boutique, in which handsome men dressed as bellhops delivered purchases, along with a bouquet of flowers, to customers who ordered one of 150 specially designed Valentine's Day bracelets.
The bracelets, priced at 30,600 yuan ($4,457), sold out a week after they went on sale on the WeChat store, the financial news website caixin.com reported.
Cartier's sales have improved on the Chinese mainland in 2016, store employees said.
Cartier reported its sales grew 6 percent year-on-year in the fourth quarter of 2016, with Chinese mainland consumers driving its sale growth in Asia, according to the company's financial statement.
Other major luxury brands also saw their sales rise on the mainland in 2016. In the third quarter, Burberry's retail sales rose 4 percent year-on-year, in part because of accelerated sales on the Chinese mainland, according to a statement the company sent to the Global Times on Friday.
Hermes' sales on the Chinese mainland jumped 7.1 percent in 2016, helping to bring its total annual sales to 5.2 billion euros.
Kering Group, which owns Gucci and YSL, announced in February that its same-store sales in 2016 soared 11 percent in Asia, excluding Japan, "led by a rebound in China."
In addition, an unnamed industry analyst said a plunge in the number of "inside shopping sessions," in which luxury brand store workers purchase items with their employee discounts, financial news portal caixin.com reported.
A drop in this phenomenon reflects reduced stockpiling - a good sign for the industry, Zhou Huaishan, founder of the Beijing-based Yishang Think Tank, told the Global Times on Friday.
Consulting firm Bain & Company estimated that sales revenue jumped by 4 percent year-on-year in China's luxury market in 2016.
China's luxury product market was the largest in the world in 2016, accounting for 30 percent of global sales, according to a report by Boston Consulting Group.
