Why Luxury Goods Are Booming In Shopping Malls In The Cold Economic Winter

Luxy means "lux" in English.

In the cold economic winter, when various consumer industries are in full swing, the luxury consumer market is like a beam of light, bringing some warmth to the cold "winter".

And China's big shopping malls, also smell business opportunities, is accelerating luxury.

1. In the cold economic winter, luxury shopping malls are booming

In April, China's service industry prosperity index (PMI) was only 36.2. At the darkest moment in recent years, relevant enterprises and "workers" exclaimed "too difficult". At the same time, Beijing SKP was very popular during the store celebration in April, which once again attracted public attention to this famous luxury shopping mall in China.

Similarly, on March 30, this year, the opening day of Hermes store in Zhengzhou Dennis Davidson mall made the industry "dumbfounded". Hermes, which had 18 sales staff, was snapped up in just a few hours. 2.1 million bracelets were sold out. Zhengzhou's little sister said to buy it, and the family had a proper mine.

In fact, it is not only SKP in Beijing and Hermes in Zhengzhou, but also luxury shopping malls all over the country in recent two years.

According to statistics, among the top 50 shopping centers in 2021, there are 14 shopping malls with sales growth of more than 30%, of which 10 are luxury shopping malls. SKP, Longji Plaza, Vientiane city and IFC of Shanghai Guojin center are all on the list. Among them, Beijing skp2021 sales volume is 240, ranking first.

Relevant experts believe that there are two reasons for the popularity of luxury shopping malls. First, during the epidemic period, central banks released water, which led to the wealth growth of the rich, which increased their purchasing power. In addition, luxury brands increased their prices in order to fight against the rising cost and global inflation, which jointly raised the sales volume of luxury shopping malls.

Second, in the past, the Chinese people in the overseas luxury market crazy "buy buy buy", because of the epidemic and disappeared. At the same time, the price difference of luxury goods in China market and overseas market is gradually narrowing, which makes it difficult for overseas purchasing agents to continue. This part of purchasing power has been transferred back to China, and the released energy has also promoted the booming market of luxury shopping malls such as SKP in Beijing in recent two years.

According to the report of Bain company, the sales volume of luxury goods in China will reach 471 billion yuan in 2021, 36% higher than that in 2020 and nearly double that in 2109. Bain also expects China to become the global luxury market by 2025.

There is a common feature in China's capital investment, which is to concentrate on what industry is hot. Nowadays, the strong gold absorption effect of luxury shopping malls and the extremely high expectation in the future have made the capital unable to restrain themselves. Will China's shopping malls accelerate the development of luxury goods?

2. China's shopping malls accelerate luxury

At present, the trend is very obvious. The shopping malls specializing in luxury goods are expanding on a large scale, not only in the first tier cities, but also in the second and third tier cities.

First of all, let's take a look at the "first brother" SKP of China's luxury shopping malls. SKP opened in Beijing in 2007 and SKP in Xi'an in 2018. The expansion is not obvious in 10 years. However, in recent two years, it has successively selected sites in Chengdu, Kunming, Hohhot and Hangzhou, and plans to open new SKP shopping malls in these cities.

Hangzhou's SKP plans to be an iterative and upgraded version of SKP in Beijing, covering an area of 170000 square meters, and its future sales are expected to exceed 10 billion yuan.

It is the first time for Hohhot to invest 500 million square meters in the construction market of Hohhot, but it is the first time for Hohhot to invest in the construction line of 3 billion square meters. Especially in Hohhot, a strong third tier capital city, the invisible rich may exceed imagination.

K11, which is also a luxury shopping mall, is also expanding new regional markets and has an accelerating trend. K11, which integrates art, culture and nature, is a brand developed in the new world. At present, there are 12 stores in the mainland and * *. According to the group's plan, 24 new stores will be opened in * * and the mainland by 2026. Most of the newly opened stores are located in Dawan District, such as Panyu in Guangzhou, Taiziwan in Shenzhen, Qianhai in Shenzhen, etc., as well as the first and second tier cities not involved in, such as Beijing, Shanghai, Hangzhou and Ningbo.

The Vientiane city of China Resources Group is known as the most concentrated shopping mall of domestic luxury brands in the industry, and its recent layout in Hangzhou has attracted attention. In addition to the Vientiane city of Qianjiang New City, China Resources Group is also planning and building three Vientiane cities in Hangzhou, namely, the central Vientiane City in Hangzhou, the Vientiane City in the north of the big city and the future technology city. The large-scale investment is not only optimistic about the market potential of Hangzhou, but also very optimistic about China's luxury market. In addition, Vientiane city is planned to open or under construction in Haikou, Fuzhou, Lanzhou, Nanchang, Changchun and other places.

UBS group, an international investment bank, once published the in-depth research report on China's shopping centers in 2021, saying that the number of luxury shopping malls in China will double in five years. In terms of the current accelerated layout of head luxury shopping malls, UBS's forecast is likely to come true.

At the same time, some comprehensive shopping centers are also working on luxury goods, hoping to increase the unit price of customers with the help of the booming trend of luxury goods. Beijing Xidan Joy City introduced Gucci in the main store location at the gate; Wangfujing APM's bottom merchants also introduced Gucci and Japanese high luxury cosmetics pola, and introduced Lancome, Burberry, second-hand luxury collection stores on the first floor, like Luxe.

Traditional shopping malls like Cuiwei department store were upgraded last year and introduced in space, a luxury collection store, including more than ten international brands such as Fendi, Prada, Valentino, burberry and Kenzo.

With the rapid expansion of exclusive luxury shopping malls, comprehensive shopping centers are actively introducing luxury brands, and traditional shopping malls are upgrading and introducing luxury brands. At present, luxury shopping malls in China are accelerating. However, some weak third and fourth tier cities still do not have luxury stores, and shopping malls in these cities also try to introduce luxury stores, but in vain. The reason is that the selection threshold of luxury stores is very high, and only when there are a certain number of luxury consumers subdivided in the region, can they choose their location here.

However, luxury brands are blooming everywhere in the third and fourth tier cities. Consumers in these cities are keen to buy luxury brands such as coach, Ralph Lauren Polo, MK, etc. Comprehensive shopping centers like Wanda Plaza and joy city are gradually sinking to the third and fourth tier cities. These comprehensive shopping centers will have some luxury brands to meet the needs of consumers.

　　3、 What is the risk of the acceleration of luxury shopping malls?

The purpose of the acceleration of luxury shopping malls is to resist the crisis brought by the economic winter and develop the blue ocean market, but it also faces higher commercial risks.

First of all, the question of whether luxury goods can be sustained in China is the problem of high income. A large part of the reason for the acceleration of luxury shopping malls is the share of luxury goods consumption returned by the epidemic, with an annual scale of more than 700 billion. However, if the epidemic is over and these high-income people return to overseas markets, the newly opened high-end luxury shopping malls in second and third tier cities are likely to be "wiped out".

A high-end luxury shopping mall, together with supporting hotels and office buildings, often needs several billion yuan to mature after opening for several years, and it will take about 10 years to recover the cost. A longer payback cycle makes luxury mall developers like a bet. Once the demand decreases due to the end of the epidemic, they will face the risk of investment failure.

For luxury brand stores that enter luxury shopping malls or shopping centers, they can withdraw in time after the demand is reduced. The loss will not be as large as that of luxury mall developers, and the risk is relatively small.

Second, the impact of online sales of luxury goods. Like ordinary goods, luxury goods industry is also accelerating the embrace of digital transformation, which will undoubtedly bring impact to luxury physical stores and stores. Since 2020, brands such as Cartier, Gucci, Prada and Armani have successively opened tmall flagship stores, and an online battle of luxury brands is in full swing in these two years.

According to the "2021 China luxury digital report" released by VIP Research Institute, the online sales volume of China's luxury industry in 2021 has an explosive growth compared with that in 2020, with an increase rate of 75%, reaching 24.7 billion U.S. dollars, and the online sales volume has accounted for 26% of the total Chinese luxury sales.

In addition, the VIP Research Institute predicts that the online sales of luxury goods in China will reach 34.6 billion US dollars this year, accounting for 30% of the total online sales. And. In the next two years, the digital transformation of luxury brand stores will involve all luxury brands and all luxury stores. In the next 3-5 years, the online order rate of luxury goods will reach 80%, and the luxury industry will enter the era of "online king".

The risk of being drained by online channels will be the risk faced by both luxury store developers and luxury brand stores. Of course, luxury brand stores can also withdraw their stores in time to reduce losses when offline demand is greatly reduced, while luxury store developers may face serious losses.

4. Quality control crisis under the acceleration of luxury shopping malls

In addition to the operational risks, luxury shopping malls may also face quality control problems after the opening of luxury brands, which will lead to trust crisis.

According to relevant media reports, Ms. Luo, a Changsha citizen, and her boyfriend bought a Vaugirard handbag at the LV counter on the second floor of Changsha Guojin center on September 12, 2020, at a price of 18700 yuan. After the handbag was bought back, Ms. Luo suspected that the bag was fake, so she sent it to China Inspection and Certification Group Hunan Co., Ltd. for inspection. The identification agency believes that Ms. Luo's handbag is not produced by LV company.

In a fit of anger, Ms. Luo will file a lawsuit with the Furong District Court of Changsha. After hearing, the court decided that LV counter would refund the payment of 18700 yuan to Ms. Luo and compensate 56100 yuan three times.

For the incident, the relevant experts gave several possible analysis: first, the salesmen of the counter swap; Second, the team is behind the brand to jointly sell fake goods. When the third party sells the product, it is the best. Fourth, dealers sell fake goods on a large scale.

No matter which one of them is, it shows that there are problems in the management of LV brand, which is related to the booming luxury market and the rapid expansion of luxury shopping malls and brands. The original supplier system and team training system can not adapt to the rapid expansion of stores, but it is the market opportunity, and these luxury brands can not give up the opportunity, Now the contradiction of quality control has been formed.

Chinese people say that speed is not enough, which may also apply to the luxury trend of Chinese shopping malls. Only by controlling risks and quality can Chinese shopping malls and luxury brands go further.