Selling LV Is Better Than Selling Masks. It'S Too Difficult For The Chinese Without The Global Luxury Market.

Source: China service network

Under the influence of the new crown virus, the domestic tourism industry has been wailing for over 2 months, and its impact on overseas tourism has just begun.

Yesterday, a 64 year old Japanese hotel was declared bankrupt. This hotel, called Fuji see Zhuang, was founded in 1956. In recent years, it has hosted Chinese tourists. The rooms are basically full of people every month. On the same day, the 100 journey network of the main visa business announced that the company could no longer continue to operate and started the liquidation process.

A series of two news reports are all the consequences of the cliff collapse of Chinese overseas consumption. But when a series of supporting services such as hotels, airlines and travel agencies are struggling, the global luxury industry, which relies on the rapid growth of Chinese customers, has suffered an unprecedented blow.

Disappearing tour groups and purchasing agents

In March 1st, Holt Renfrew, located in downtown, Vancouver, launched a sales promotion campaign which was much more vigorous than Christmas. It bought 500 knives, minus 70, and 2 days in a row. I don't know if it was out of coincidence that its activity rules were exactly the same as those of Tmall 11.

As Canada's top luxury department store, it includes Balenciaga, La Mer, Louis Vuitton, Givenchy... Almost all the top luxury brands in Europe can be found in this shopping mall. The high-end positioning makes the mall a paradise for rich people to lounge. Most of the people are concentrated in The Bay Center, Metrotown and other more popular shopping malls.

People thought that the owners of the luxury cars parked at the entrance of the Holt Renfrew parking lot belonged to price insensitive consumers. But these 2 days' concessions made Holt Renfrew become a "vegetable market". There are many people coming and going. Many people are optimistic about a bag and never try to carry it back.

Looking at it, 80% of them are Asian faces. Almost every brand store here has a Chinese shopping guide. They will visit WeChat's latest patron style or the latest discount activities with regular patronage customers.

But this time alone, the shopping guide seems to have coincided, calling on their "God" to come to the collective last weekend, and this special activity is actually a special preparation for shopping centres against China's epidemic situation.

The effect of this short sale will not last for a long time. For these big names, apart from local tourists, they rely more on Chinese land companies and buyers.

Vancouver, as the most concentrated gathering place for Canadian Chinese, has also attracted many short stay Chinese tourists, which has brought huge volume of traffic to local shopping malls and luxury brands, but in the past 2 months, including China Airlines, Air Canada, Eastern Airlines and even the United Airlines flight from the United States received a travel ban, and the very low attendance rate also gave Airlines no reason to fight against flying.

After the disappearance of the tour group, the buyers are also having a bad time.

Foreign students and professional buyers who have long stay in foreign countries can touch the supply of goods under the line, but they lack the channels to send them. With the sharp reduction of flights, the price of air tickets has skyrocketed and the lowest rate of tax risk is not worthwhile. Many cities in China are in a semi closed state. The packages that can be served in 3 weeks are now only in a state of "clearance".

Anna, who designs the design at Simon Fraser University, says many luxury stores have released the restriction treaty. One can buy several bags. She now saves money and uses all her pocket money to hoard her bags every day.

"The economy is cyclical. Considering the SARS of that year, there will be a wave of retaliatory consumption after the outbreak."

Anna says it is building its own "private area traffic pool", which has drawn many people through its mother's circle of friends. The rich "aunts" are eager to pack their new bags and walk in the spring without wearing masks.

There are few people who have such investment ideas. With the cancellation of flights and the suspension of visas, Canadian shopping centres may experience one of the worst selling seasons in recent years.

　 When Chinese people no longer buy and buy

According to Bain consultancy report, global luxury goods consumption was 1 trillion and 300 billion euros in 2019. Under the background of global economic slowdown, the growth of the market came mainly from wealthy Chinese. 35% of the world's personal luxury goods are digested by the Chinese people, and 90% of the total market growth comes from China. Traditionally, the most expensive luxury goods in Europe has fallen by more than 20%.

Although more and more brands are working with Tmall and Jingdong, they attract young consumers who are interested in new things. However, the role of digital information channels for luxury brands is more to help consumers get information and brand display. Their real consumption scenes are often in the resplendent shopping malls, where credit card machines, smiling salesmen and elegant decorations can give consumers more ritual satisfaction and satisfaction.

Online shopping malls are closing down under the epidemic. In addition, the pessimism of the economy and possible revenue reduction have led many Chinese consumers to hesitate to buy luxury goods.

40% of the sales of British branded Burberry came from Chinese consumers, and Julie Brown, chief financial officer, said the negative impact of coronavirus was serious. Customers visited 44 stores in China, with a sharp decrease of 80%, and the company will reduce its performance expectations for the whole year.

Economist Matthew Dass pointed out that "the commercial impact of the epidemic can reach 73 billion dollars, which will far outweigh the losses caused by SARS in 2003."

Luxury is only part of it. It is the slowest growth. Italy, which has a large share of tourism, is just preparing to increase its direct flights to 108 flights with China, but now it has all been drifted away from GDP. Gian Marco Centinaio, Minister of tourism of Italy, said the absence of Asian tourists could eventually affect the macro figure of GDP.

Many people in Asia and North America have cancelled their travel plans for the first half of this year.

The hotel industry has been hit hard. The occupancy rate of hotels in Hongkong and Macao has dropped to 5%, and Hilton expects to have a maximum income gap of $50 million this year. The cruise industry is not expected to get better this year. Airbnb, the US version of "public comment" TripAdvisor, the hotel subscription website Expedia and other tourism technology companies have gradually reduced the scale of operation.

Facing the "closed door" of a strong economy, the global tourism and luxury goods industry will have to face a long winter. What is even more frightening is that no one knows when the Chinese consumers will return.