Last year, as the coronavirus pandemic took hold worldwide, China’s case numbers remained relatively low and the country’s share of the global luxury market roughly doubled, according to consultancy Bain.
The latest government initiative — which coincides with a regulatory crackdown on industries from technology and education to gaming and entertainment — has raised concerns.
While Xi’s plans are still taking shape, his government has made clear that it ultimately wants to raise the incomes of more households and expand the middle class.
“Initially when it was announced, people panicked,” Zuzanna Pusz, a UBS analyst, said of the “common prosperity” pledge.
“In the past three months, the sector has underperformed the European market …
Some companies have taken the hint from Beijing.
There have been signs of apprehension within the luxury world.
Less than a decade ago, the luxury industry was hit hard by a massive anti-corruption drive in China.
The campaign, rolled out by Xi in 2012, had a dramatic impact on the sector.
Some fashion brands were eschewed as shoppers looked for less conspicuous logos or designs.
During the 2012 anti-corruption crusade, swanky hotels suffered, too, as officials called off banquets and conferences.
Previously, many luxury brands in China were driven by the tradition of executives or officials giving or receiving gifts, which was a huge target of the campaign, Lannes noted.