Under The Luxury Market, The Cold Market Bets Online.

On February 27th, the Lunar New Year holiday should be an important trading node for luxury goods businesses, but affected by the epidemic, many luxury brands had to reduce their performance expectations for the 2020 fiscal year and take temporary measures to close stores in China and shorten business hours.
Recently, Bernstein worked with Boston Consulting Group to investigate 28 industry executives from selected luxury brands to find out what their expected impact would be. But Bernstein refused to disclose the specific names of the executives interviewed by Boston.
It is reported that these executives predict that due to the spread of the new crown virus, luxury sales in 2020 will be hit by 30 billion to 40 billion euros (32 billion to 43 billion U.S. dollars). In addition, 43% of the surveyed executives said they expect sales in the next three to six months to be affected before they become stable.
In fact, the impact of the new crown virus is often compared to the SARS epidemic in 2003, which also hit luxury sales at that time, but the brands quickly recovered from the incident.
Bernstein's report points out a major difference between the two epidemics. A group of analysts wrote: in 2003, Chinese consumers accounted for only 2% to 3% of the global luxury market demand, but now the proportion of Chinese consumers is 10 times that.
According to Bain consultancy data, in 2019, global consumers spent 306 billion dollars on personal luxury goods, and Chinese shoppers accounted for more than 1/3 of global luxury goods sales. Among them, Chinese consumers also contributed 2/3 of the growth in the global luxury industry.
This means that the luxury industry will be expanded by the Chinese market. According to the "electricity business", Burberry group has closed about 1/3 of Burberry stores in China, but the number of stores still open has dropped by 80% compared with the same period last year. Therefore, Burberry also withdrew its annual performance forecast for 2020.
In addition, Capri, the parent company of Michael Kors, Versace and Jimmy Choo brands, said they decided to close 150 of its 225 Chinese stores and cut its sales forecast by 100 million US dollars this quarter.
It is not hard to see that the most direct impact of the epidemic on luxury goods is the shrinking of online stores. According to statistics from the Industry Research Institute of Shanghai Jiao Tong University, in the five major cities of Wuhan, Shenzhen, Guangzhou, North and the north, during the Spring Festival, the flow of luxury shopping centers and luxury flagship stores dropped by about 80% compared with 2019.
However, many luxury companies have turned their attention to online shopping activities under the influence of many luxury brands and retail stores. Take the luxury electric business Temple library as an example, after the temple library has issued an announcement of the initiative, it absorbs more brands and buyers shop to enter the temple library online mall, helping to digest existing inventory and increase cash flow.
Recently, Ontimeshow officials announced that due to the recent outbreak of pneumonia caused by the new coronavirus, the Ontimeshow2020 autumn and winter exhibition, which was scheduled for March 27th to March 30th, will be postponed. All businesses will start the online ordering mechanism for the first time, and will exclusively open all the brands to the temple Library platform.
It is learnt that fashion shows are actually a platform for buyers to buy goods and exchange the latest information. They also indirectly maintain the high-end VIP customers and media relations invited to participate in fashion shows every season. Whether they are cancelled or postponed, they will have a certain degree of impact on the brand.
This cooperation will not only broadcast Ontimeshow live topics, but all Ontimeshow signed brand designers and buyer shops can broadcast live on the side of the temple library.
In addition, the Prada Tmall flagship store has been formally launched in the past two days. It is in the trial operation stage. The main body of the operation is to authorize Tmall, and the domestic shipping warehouse is located in Jiaxing. It takes SF's mail delivery; Louis Vuitton grabs the marketing node, launches the Valentine's Day Limited store in WeChat's small program, and achieves the online channel sales of two times higher than that of the same period last year.
On the whole, the epidemic is both a challenge and a magnifying glass for the luxury industry. After all, the cold market is a problem facing the luxury industry in China. But it can also accelerate the integration of online and offline industries, and promote the tight integration of the luxury goods industry and the digitalization of the Internet.